Provide an example of each of the four different ways industry is organized (the different degrees of market power) and explain why you believe them to be good examples

The followings are the examples of each of the four different ways industry is organized -

1) Perfect Competition : Salt producing industry is a good example of perfect competition. Under perfect competition, there are large number of buyers and sellers, selling homogeneous good. The salt industry also have large number of buyers and sellers. The product, salt, is homogeneous in nature and there exist no difference of offering from one to another. In addition, industry decides the price and sellers are price taker. Perfect competition is the nature of the salt industry.

2) Monopolistic competition - Fast food industry comes under monopolistic competition. Large number of sellers provide similar goods with differentiation. As goods offered are heterogeneous in nature, there exist advertisement and each seller decides own price. Entry and exit is easy in the industry. The market power does not concentrate in few hands of sellers. There exist high competition.

3) Monopoly - State owned Railways is monopoly of government. The railway services are offered by the state only. There is no close substitute of railways and entry of private players is restricted. The market power solely lies in the hand of the state and hence the industry is highly concentrated.

4) Oligopoly - Petroleum industry is a classic example of oligopoly, Cartel like OPEC controls the market power. The concentration resides in the hand of few large players who have major source of oil and petroleum. These are countries like Saudi Arabia. Entry barriers are high and there exist large number of buyers.