Question

What are the types of market in economics and their brief definitions?（please more detail，thanks）

Answer 1

ANSWER:

Market structure in economics is categorized on the basis number and type of firms operating in an industry.

Main factors that determine market structure are number of sellers, nature of product, level of knowledge to buyers and sellers, possibility of entry and exit for firms, control over price etc.

On the basis of above factors, we can define forms of market structure as -

1. Perfect Competition - It refers to a market structure where there are very large number of buyers and sellers dealing in a homogeneous product at a price fixed by the market. In such a market, no individual firm can influence the market price on its own. In reality, such kind of a market rarely exist. Close example could be of a local vegetable market where there are numerous farmers selling fruits and vegetables at almost identical prices.
2. Monopoly - It refers to a market structure where there is a single seller selling a product which has no close substitutes. For instance railways in India.
3. Monopolistic competition - It refers to a market structure where there are large number of firms which sell closely related but differentiated products. For example markets for toothpaste, soap etc.
4. Oligopoly - It refers to a market structure in which there are a few firms selling homogeneous or differentiated products. e.g automobiles market, mobile network operator industry etc.