Describe the characteristics of the following structures: monopoly, perfect competition, oligopoly, monopolistic competition

Monopoly:

• There exists only one seller and large number of buyers in the Monopoly competition.
• There exists high market restriction to enter the monopoly market
• The monopoly caters to the entire market demand and has full control over the price and output decisions in the market
• There is availability of no close substitutes in monopoly market.
• A monopolist can engage in price discrimination.

Perfect Competition:

• In Perfect Competition, there exists large number of buyers and sellers in the market.
• Each seller sells identical product.
• Due to the presence of large number of sellers, the sellers in a perfectly competitive market faces a perfectly elastic demand curve.
• There is no restrictions in entry or exit in the market.
• Each seller is a price taker, but can decide their individual output level at the given price.
• The buyers and sellers in the market have perfect and complete information.

Oligopoly:

• In oligopoly, there exists few large firms in the market and large number of buyers
• Each firm has a significant market share ans is interdependent on each other for price and output decisions
• The firms can sell either identical products or differentiated products
• Considerable amount of restriction exists in the market
• Each individual seller faces a kinked demand curve

Monopolistic Competition:

• There exists large number of buyers and sellers in the market.
• Each seller faces a relatively elastic demand curve which is downward sloping.
• The sellers sell differentiated products
• Sellers have considerable freedom for price and output decision
• The firms compete with each other using advertisements and marketing tactics
• Considerable freedom of entry and exit from the market.