Types of Market

1. S.BINTHIA
Department of Management Studies
V.V.Vanniaperumal College for Women
Virudhunagar

2. The situation prevailing in a market in
which buyers and sellers are so numerous and
well informed that all elements of monopoly are
absent and the market price of a commodity is
beyond the control of individual buyers and
sellers.

8. A market structure characterized by a single seller, selling a unique product
in the market. In a monopoly market, the seller faces no competition, as he
is the sole seller of goods with no close substitute.
Pure monopoly is represented by a market situation in which there is a
single seller of a product for which there are no substitutes; this single
seller is unaffected by and does not affect the prices and outputs of other
products sold in the economy.” Bilas
“Monopoly is a market situation in which there is a single seller. There are
no close substitutes of the commodity it produces, there are barriers to
entry”. -Koutsoyiannis

10. 1. One Seller and Large Number of Buyers:
The monopolist’s firm is the only firm; it is an industry. But the number of buyers is assumed
to be large.
2. No Close Substitutes:
There shall not be any close substitutes for the product sold by the monopolist. The cross
elasticity of demand between the product of the monopolist and others must be negligible or
zero.
3. Difficulty of Entry of New Firms:
There are either natural or artificial restrictions on the entry of firms into the industry, even
when the firm is making abnormal profits.
4. Monopoly is also an Industry:
Under monopoly there is only one firm which constitutes the industry. Difference between
firm and industry comes to an end.
5. Price Maker:
Under monopoly, monopolist has full control over the supply of the commodity. But due to
large number of buyers, demand of any one buyer constitutes an infinitely small part of the
total demand. Therefore, buyers have to pay the price fixed by the monopolist.

13. Monopolistic competition is a
market structure which combines elements
of monopoly and competitive markets.
A monopolistic competitive market
is one with freedom of entry and exit, but
firms can differentiate their products.
Therefore, they have an inelastic demand
curve and so they can set prices.
There is freedom of entry,
supernormal profits will encourage more
firms to enter the market leading to normal
profits in the long term.

18. A duopoly is a situation where two
companies own all, or nearly all, of the
market for a given product or service.
A duopoly is the most basic form of
oligopoly a market dominated by a small
number of companies.
A duopoly can have the same
impact on the market as a monopoly if the
two players collude on prices or output.

19. The two companies that participate in the duopoly look for ways
to maximize all their profits by looking at how to match their income
through the product sale plus the costs involved in producing it.
Companies agree to share the market in half.
Industries have the ability to set prices and have the power within the market
to calculate and set these prices above marginal cost.
They produce loss of efficiency, a characteristic of monopolies.
They do not have the capacity to allow competitors to enter.

20. A bilateral monopoly exists when a market has only one supplier and one buyer.
The one supplier will tend to act as a monopoly owner and look to charge high
prices to the one buyer.
The lone buyer will look towards paying a price that is as low as possible. Since
both parties have conflicting goals, the two sides must negotiate based on the
relative bargaining power of each, with a final price settling in between the two
sides' points of maximum profit.