2. Few firms dominate the market
Each firm produces big portion of the total industry output.
Products are identical or differentiated
Identical e.g.
Steel, lead, cement & other raw materials
Differentiated e.g.
Finished goods like typewriter, airplanes, locomotives, cars &
sewing machine
There is a price agreement among the producers to
promote their own economic interests.
The entry of new competition in the market is difficult.
There is strong advertising among those who produce
differentiated products.
4. Government laws and policies
In some industries, the government controls the
degree of competition in the interest of the
economy and the consumers.
5. Technology
For quit some time, certain firms, have enjoyed
their business positions as monopolists. In
fact, they have reaped great economic portions as
the only suppliers of products which did not have
competition.
6. Business Policies and Practices
The presence of giant firms discourage the entry of
new firms with little resources. In some cases, the
bigger firms resort to cut-throat competition
which is an unfair business practice to drive away
their competitors.
7. Economic Freedom
The existence of economic freedoms like the right
to own private properties, the right to engage to
any lawful business, the right to accumulate
income and other similar economic freedoms
associated with a free-enterprise economy have
some how change the market structures.
9. Pure Competition
The demand curve of an individual firm under a
purely competitive industry is perfectly elastic.
This is the increase or decrease of the output of a
single seller has no effect on the total supply anf
market price.
