Common competitive market types include perfect competition, monopolistic competition, oligopoly, and monopoly.
1. A perfectly competitive market, also known as a pure competitive market or a free competitive market, refers to an industry in which there are many production and sales companies, and they all provide similar, standardized products to the market in the same way. (such as grain, cotton and other agricultural products) market. Neither sellers nor buyers have control over the price of goods or services.
2. Monopolistic competition is one of the main market forms. The concept in economics is: a market structure that is infinitely close to perfect competition. The obvious characteristics of monopolistic competition are:
1. There are many producers and consumers in the market, and consumers have obvious preferences, and goods and services are "non-homogeneous";
2. Entry and exit from the market are completely free;
3. There are differences in the many commodities provided by various producers, but there is no essential difference.
3. Oligopoly refers to large monopoly capitalists or monopoly capitalist groups that hold huge financial capital and actually control the lifeline of the national economy and national power. They have a small number of manufacturers and interdependence among manufacturers. The price is stable and it is not easy for manufacturers to enter and exit.
4. Monopoly means that there is only one company (or seller) trading products or services in an industry. Generally divided into seller's monopoly and buyer's monopoly. Seller's monopoly means that the only seller faces competing consumers in one or more markets through one or more stages; buyer's monopoly is just the opposite.
The differences are as follows:
Types of monopoly
1. Franchise monopoly
Some exclusive business privileges are stipulated by law and are subject to legal Protected, patents and copyrights are monopolies licensed by law. In order to encourage creation and invention, most countries have enacted patent laws. It can be seen that patent monopoly is caused by legal barriers. In some cases, the government grants a manufacturer exclusive rights to operate; other times, the government grants exclusive operating privileges through contracts through bidding competitions.
2. Natural monopoly
If a certain product requires a large investment in fixed equipment and large-scale production can greatly reduce costs, then a large manufacturer may become the only producer in the industry who. When one large manufacturer supplies all market demand, the average cost is the lowest. If two or more manufacturers operate in the market, it will be difficult to make profits. In this case, the manufacturer forms a natural monopoly.
3. Strategic monopoly
If no one else except the monopolist masters a certain production technology or know-how, the market will naturally form a technical monopoly. When there are neither technical barriers nor legal barriers, manufacturers establish or consolidate their monopoly position by building high barriers. This is a strategic monopoly.
4. Other monopoly barriers
The above barriers do not list all factors, nor are they necessarily mutually exclusive. For example, a manufacturer controls the supply of a certain raw material. All barriers that prevent competitors from entering the market are causes of monopoly.