In five pages this paper discusses different models of market competition including monopoly and oligopoly, monopolistic competition, and perfect competition. Two sources are listed in the bibliography.
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the amount of competition in any sector. In general terms these are broken down into four models; perfect competition, monopolistic competition, oligopoly and monopoly. In reality this should be seen
as a sliding scale, as it is unlikely that any sector exists where there is perfect competition, and pure monopolies are also disappearing, therefore most markets are on a sliding
scale at some point between these two extremes. We will consider the characteristics of each model separately and this will clarify the position.
Pure Competition Pure competition is the best state of many industries for the consumer as it often results in the lowest prices.
It is also worth remembering that this is a model as pure competition is unlikely due to the way in which it operates. In a situation of pure competition the
only determining feature in the setting of price and supply will be the basic model of supply and demand (Thompson, 1998).The products or service will usually be directly comparable so
like can be compared with like, and there will be no barrier to entry or exist as a limiting factor of the industry, therefore there are no external influences such
as regulation or price controls (Thompson, 1998). One of the best examples of this may be seen as an agricultural market
where there are many stalls selling the same goods, if one stall is selling carrots at a price below the others then it will be the stall that sells the
most the rest of the stalls will have to reduce their prices to compete if they want to sell any products. This is also determined by supply and demand, where