wat are the definitions of pure monopoly,pure competition, monopolistic comp., oligopolistic competition??

Question

in my search it says here that there are 4 types of markets to consider in pricing; pure competition, monopolistic competition, oligopolistic competition, and pure monopoly... what are its different definitions and how are those related to pricing?????? i hope you can help me.........

Answer 1

In pure competition, there is a large number of sellers selling homegenous products and there are low barriers to entry. Neither buyer nor seller can influence terms of exchange as it is set by market.
In monopolistic competition, there is a large number of sellers selling differentiated products. Similarly, there are low barriers to entry. Price can be set by sellers as consumers perceive real or imagined differences in these products.
As for oligopolistic competition, there are few sellers and high barriers to entry. Products may be differentiated or homogenous. Price is determined by the sellers as they have power.
Lastly, for pure monopoly, there is only a single seller and there are high barriers to entry because of government policies usually. These are mainly government-owned companies. Price is set by the seller as seller has absolute power.

Answer 2

Just to set the report vocabulary straight: the terms are "perfect" not "pure" competition and monopoly. Otherwise, the answers above are correct. Some examples of each might enhance your grade:
Perfect competition exists in the American market for catfish. No single breeder of catfish can influence the market price. If they charge higher, they sell nothing and if they charge lower than equilibrium, theoretically they take all purchases.
Pure monopoly exists in the market for glass crystals. Swarowski is so large, it can control the market price. Competitors cannot enter because the setting up costs are so high, it would take years to get the investment back and Swarowski could undercut anyway. The UK Office of fair Trading defines a brand that has 20% of the market as a monopoly, e.g. nescafe controls around 40% of the instant coffee market, so Nestle is a monopolist.
An oligoply exists in markets like alcoholic drinks where Diageo and a few others control most of the world market and basically, they all keep prices around the same to maintain their profits. It also exists in the chocolate bar market with a few, large brand leaders.
Monopolistic competition could be said to exist in the market for writing paper and envelopes. Lots of suppliers all clammering for a little extra market share by trying to make their products look different from the competitors'.

These markets are being eroded by the large superstores: Tesco, Sainsbury, Asda, etc. because their command of the retail distribution market allows them to devote half of their shelf space to their own-label products and the other half to be shared by branded manufacturers. This distorts availability of the consumers' preferred brands.

Good luck with the report.

Answer 3

Very Simply

A monopoly is where there is just one supplier of a product in the market. "Super profits" can be acheived as they can generally charge higher prices than where there are many competitors.

An Oligopoly is where there are just 3 or 4 big suppliers in a market. In an oligopoly, any decision taken has to seriously consider how their rivals will react as they are so closely linked.

Its been a long time, but i would say that pure competition is where there are an almost infinate number of suppliers supplying identical products. The market rules. If a supplier increases his price above the market price, his sales volumes will plumit as there are many more selling at lower prices.

Monopolistic competition is similar to pure competition, however, suppliers try to differentiate their products from others - e.g. brands. and are thus able to sell their product at a premium. (i think)

As i say, its been 20 years since i studied this, so it may be a little fuzzy now.