StudentShare solutions
Triangle menu
  • Home
  • Subjects
  • Marketing
  • What are the main differences between Monopolistic Competition and Oligopoly market structuresWhich of these market structures best serves the interests of the consumer and why

What are the main differences between Monopolistic Competition and Oligopoly market structuresWhich of these market structures best serves the interests of the consumer and why - Essay Example

Nobody downloaded yet

Extract of sample
What are the main differences between Monopolistic Competition and Oligopoly market structuresWhich of these market structures best serves the interests of the consumer and why

In this type of market structure the firm takes the price charged by the competitors as given and does not take into consideration the impact of its price on that of competitors. In the short run the firms operating in monopolistic market can act as monopolies but in the long run the other firms enter into the market and the gains of differentiation takes the downward sloping curve with competition.
Oligopoly is regarded as the market structure where there are large firms operating in the market with significant barriers to entry. The oligopolists are aware of the conditions prevailing in the market as the market is dominated by only few sellers. The decision undertaken by one firm will influence the other firms operating in the market as well as the market as a whole. The decision or the responses of the market participants should be taken into account in the planning process. The prevailing competition in the market structure can give rise different outcomes. An operating firm in the oligopolistic firm can maximise the profit by operating at the level where marginal revenue is same as marginal costs. Differences The primary differences between the two types of market structures are in terms of relative size and control of the market of each firm on the basis of the number of competitors in the existing market structure. It is difficult to find clear cut evidences that cite the differences between the two market structures. Some industries can posses the characteristics of both oligopoly and monopolistic firm. With decrease in the level of competition the firms tend to behave more likely to that of oligopoly and less likely to that of monopolistic competition. The monopolistic market structure offers differentiated products. The suppliers are aware of the price system existing in the market i.e. they are the price makers. The barriers to entry are not stringent in the short run but in the long run the firms can enter or leave the industry. The sellers can act in independent fashion within the market. The demand curve slopes downward and is more elastic than that of monopolists (Economics, 2012). The firms operating in the oligopolistic market structure are interdependent. The products offered can be homogeneous as well as can be differentiated across producers. The interdependence among the firms is correlated with the homogeneity of the products. A huge amount of investment is usually associated with entry in the oligopolistic market. In this market structure the firms can collude and impose some restricted trade practices with the aim to raise prices. The profit of the industry is maximized with the collusion of firms. If one firm believes that the other firm will keep the output level constant it can raise the productivity so as to gain maximum revenue. In a situation characterised by cartel the firms can recognize the significance of joint profits from producing each unit of output. However if one firm believes that the other firm will increase the level of productivity, then the other firm will try to increase the productivity faster to gain the first mover advantage (Central Washington University, 2003, p. 3). In this situation the cartel will broke. The significance of market structures on interests of consumers As long as the consumers are happy in demanding one product regardless of the prices of other products the seller of the product will be acting as a ...Show more

Summary

In the short run the firms operating in monopolistic market can act as monopolies but in the long run the other firms enter into the market and the gains of differentiation takes the downward sloping curve with competition…
Author : leokuvalis
What are the main differences between Monopolistic Competition and Oligopoly market structuresWhich of these market structures best serves the interests of the consumer and why essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"What are the main differences between Monopolistic Competition and Oligopoly market structuresWhich of these market structures best serves the interests of the consumer and why"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

What are the main differences between Monoploy and Monopolistic Competition market structure
For example, British Telecom enjoyed a monopoly until 1988 when the UK office of telecommunication decided to end it. The basis for a monopoly market is the existence of barriers to entry.
5 pages (1250 words) Essay
Differentiating Between Market Structures
The paper will analyze the market forces of the company and the associated competitive strategies. The market structure where the company operates will also be examined. Market Analysis The company has been successful in catering the customers. The businesses specialize in hiring chefs and train them to serve the purpose.
4 pages (1000 words) Essay
Market Structures in Sony Corporation
A Sony Corporation is a leading manufacturer of electric electronic gadgets all over the world such as music, online business, motion pictures, television, and computer entertainment. The organization has gained recognition throughout the world following its high awareness of products to the customers.
4 pages (1000 words) Essay
Differentiaitng between market structures
These market structures range from the perfect competition to monopoly, in between these two extremes are the monopolistic competition and oligopoly. Their differences may be summarized through the number of firms present in the industry, barriers to entry, their market power and the type of products they are selling (Schiller, 2006).
6 pages (1500 words) Essay
Differiating Between Market Structures
al, 2011). Therefore, market structure affects the market outcomes by influencing opportunities, motivations and decisions of vast industries participating in the market. The aim of market structure analysis is to isolate the effects in an attempt to predict and explain the market outcome.
4 pages (1000 words) Essay
What are the main differences between Monopolistic Competition and Monopoly market structure Which of these market structures best serves the interest of the consumer and why
It means that an imperfect firm has a control over the market price. This control varies from industry to industry. Monopoly is the extreme condition of imperfect competition. It is just the opposite of Perfect competition. In a Monopoly, there is a
4 pages (1000 words) Essay
Monopolistic Competition and Oligopoly market structures

The author states that some industries can posses the characteristics of both oligopoly and monopolistic firm. With decrease in the level of competition the firms tend to behave more likely to that of oligopoly and less likely to that of monopolistic competition. The monopolistic market structure offers differentiated products.

4 pages (1000 words) Essay
What are the main differences between Monopolistic competition and Oligopoly market structureswhich of these market structures best serves the interests of the consumer and why Use diagrams to support and and illustrate your answer
In a monopolistic market, while one or a few players may be able to dominate the market, they can only do so for a short time until the other players are too powerful for them to continue with the dominance.
4 pages (1000 words) Essay
Main differences between perfect competition and monopoly market structures
The perfectly competitive market structure is very difficult to achieve and is, therefore, compared as the benchmark for other forms of market structure. The characteristic features of a perfectly
4 pages (1000 words) Essay
Main differences between perfect competition and monopoly market structures
Firms that are perfectly competitive have many competitors because they offer almost the same products. These market structures have no barriers to
4 pages (1000 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment