Market Structures

Through this essay, I 'm aiming to discuss the various types of market structures in the business industry. There are five markets structures which are perfect competition, monopolistic competitive market, oligopoly, monopoly , pure monopoly. The purpose of this essay is to compare the market structures of the monopolistic competitive market and monopoly in terms of size and the number of firms, competitors and further more. I will also discuss and compare how these market structures react in the short run and the long run in relation to profit.

Monopolistic competitive market and monopoly are dissimilar markets. The Monopolistic competitive market can be described as a market where they are slightly differentiated products. For example, hairdressers , coffee shop , restaurants ,etc. Each business is diverse in some ways in terms of design, color, customer service , packing, and quality.Therefore, the firm can raise the cost of the item without the loosing majority of its clients. They have some element of control over the cost on account of the way they can separate their items somehow from their opponents.They are price makers and …show more content…
In a monopoly, the firms are protected by high barriers to entry and no other competitions to face them. Some of the barriers could be that the company might have a patent on the invention, copyright on the design , owning a key resource and also being the sole provider of the product or service. So other firms will not have access to the resource, this means the potential rivals with find it difficult to enter the market .From the lack of substitutes, the consumers will have to purchase the product or service from the firm with the monopoly power. This will give the provider the ability to dictate the price and keeping it high without having the fear of being undercut by other providers, so they are price