Monopolistic Competition vs. Oligopoly

Maria Gonzalez

Perfect competition, monopoly, monopolistic competition and oligopoly are the four primary market types.
Perfect competition: is a market structure with many well-informed sellers and buyers of an identical product and no barriers to entering or leaving the market. (Slavin, 2011) This market is made up of buyers and sellers trading in uniform goods like cooper or wheat. No one seller or buyer have a significant effect on the ongoing market price. The seller may not change more than the going price, because the buyer can buy as much as they must have at the going price. An example of this would be: The farming industry, in this region many farmers produce their products to sell it to the government at a fixed price, given then no freedom to change the price. In the perfect competition market there is minimum or no need for using marketing research, sales promotions or advertisement. Therefore, in this market there is little need to spend much time on marketing strategy.
Monopoly is a firm that produces all the output in an industry. (Slavin, 2011) .Therefore, the solitary business is the industry. Access into such a market is limited due to high costs or other obstacles, which may be social, political or economic. For example, a government can generate a monopoly over an industry that it wishes to control, such as oil. Additional reason for the obstacles in contrast to entering into a monopolistic industry is that oftentimes, one entity has the exclusive rights to a natural resource. For instance, in Saudi Arabia the government has exclusive control over the oil industry. A monopoly may also form when a firm has a copyright or patent that stops others from entering the market.
Oligopoly: An industry with just a few firms. (Slavin, 2011) These main groups of firms have control over the price and, like a monopoly; an oligopoly has extraordinary obstacles in order enter. The goods that the oligopolistic firms create are often practically alike...