What is the similarities between perfect competitive monopoly monopolistic competition and oligopoly?

Answer 1

Not many differences. Capitalism favors competition among private companies, but rarely creates monopolies. One source, in the references, says monopolies can be created by governments more than private companies.

References:

http://www.americansolvent.com/2009/07/03/competition-vs-monopoly-whats-the-big-confusion/

Answer 2

In a perfect competition, the buyer is free to buy from any seller he or she chosses. :)

in perfect competition there are many industries and the product is homogeneous

in monopolistic competition there are many industries but the product is not homogeneous

in monopoly there is only one company that produces the product

in oligopoly there are not many industries that produces the product and there is a leader industry which "Rules" and controls the price

Answer 3

A monopoly is a market structure in which there is only one producer/seller for a product. In other words, the single business is the industry. Entry into such a market is restricted due to high costs or other impediments, which may be economic, social or political. For instance, a government can create a monopoly over an industry that it wants to control, such as electricity. Another reason for the barriers against entry into a monopolistic industry is that oftentimes, one entity has the exclusive rights to a natural resource. For example, in Saudi Arabia the government has sole control over the oil industry. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Pfizer, for instance, had a patent on Viagra.

In an oligopoly, there are only a few firms that make up an industry. This select group of firms has control over the price and, like a monopoly, an oligopoly has high barriers to entry. The products that the oligopolistic firms produce are often nearly identical and, therefore, the companies, which are competing for market share, are interdependent as a result of market forces. Assume, for example, that an economy needs only 100 widgets. Company X produces 50 widgets and its competitor, Company Y, produces the other 50. The prices of the two brands will be interdependent and, therefore, similar. So, if Company X starts selling the widgets at a lower price, it will get a greater market share, thereby forcing Company Y to lower its prices as well.

There are two extreme forms of market structure: monopoly and, its opposite, perfect competition. Perfect competition is characterized by many buyers and sellers, many products that are similar in nature and, as a result, many substitutes. Perfect competition means there are few, if any, barriers to entry for new companies, and prices are determined by supply and demand. Thus, producers in a perfectly competitive market are subject to the prices determined by the market and do not have any leverage. For example, in a perfectly competitive market, should a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, causing any firm that increases its prices to lose market share and profits.

Gyan Prakash Singh

MBA(IT)

er_gyanpsingh@Yahoo.com

Answer 4

All of these market systems MUST produce at the qunantity of max profit if they want to make the most amount of money. (aka MC=MR)