Please explain the four types of completion. Why is it important to recognize these different forms...

Please explain the four types of completion. Why is it important to recognize these different forms of competition?

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Expert Solution

Four types of competition are -

1. Perfect competition -

Large number of firms in the market
It sells homogenous products
Its demand Curve is horizontal
They are price takers
Very easy entry for firms in this market

2. Monopolistic competition

Large number of firms in the market
It sells differentiated products
Its Demand curve is downward sloping but elastic
They are price makers
Easy entry of firms in this market

3. Oligopoly

There are few firms in this type of market
It sells both differentiated and undifferentiated product
Demand curve is downward sloping but relatively inelastic
They are price makers
Entry of firms is difficult

4. Monopoy

There is only single seller in This market
They sell unique product
Demand curve is downward sloping but inelastic
They are price makers
Entry of firms is very Difficult.

It is very important to know your market because knowing your market will only help you to decide

Price level,
profit level,
Which type of product is to sold that is differentiated or homogeneous.
How Many buyers are there
Demand curve

Rahul Sunny answered 1 year ago

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