Four Characteristics Of Market Structure: Darlie's Market

Market Structure is the one of the important theories for us to understand the function of market and determine the behavior of firms in the market. It also can be defined as a characteristic or specificity of a company in a market. There are four types of market structures which are perfect competition, monopoly, oligopoly and monopolistic competition. According to our analysis, Darlie is a monopolistic competition. Darlie is in a market that there are many competitive firms selling differentiated products, no barriers to entry or exit, the firms are price maker and non-price competition in monopolistic competition market.
The first characteristics of monopolistic competition are a large number of competing firms and each of the producer has satisfying the market demand of the product for the same group of consumers. These producers do not …show more content…
As the product of monopolistic competition market, the firms have power to make independent decisions about the price and output based on its market, product and costs of production because toothpaste is the product that people necessary need to use it in daily. With this, the firm can set its own price to its product but does not take it from industry as whole. The reason is we found that Darlie is only the small part of the total industry of toothpaste in monopolistic competition. Thus, Darlie brand firm has limited power to control over the market price of total industry. If the price of toothpaste increases, customers will switch to another brand. Although in monopolistic competition, there is price maker but Darlie firm cannot set the price too high. On the other hand, Darlie apply non-price competition strategy also is one of the characteristic of this market. Darlie try to distinguish their product from competing products based on set low price for its products in order to attract more customers to purchase their