The basic characteristics of monopoly (Nov'10), oligopaly, monopolistic competition and pure competition.

Q. Identify the basic characteristics of monopoly (Nov'10), oligopaly, monopolistic  competition and pure competition.

 

Monopoly (Nov’10):

One firm

Complete barrier to entry

Total control over price

One product

According to Professor Brenham, “The monopoly can fix whatever price he pleases or can sell whatever amount he planes but he cannot sell as much likes whatever price he likes.”

According to Economist Stigler, “Monopoly is such a firm producing a commodity of which there are no clause substitutes.”

Oligopoly:

2-3 firms

High barrier to entry

Control majority of output

Similar/identical products

Monopolistic Competition:

Many Firms

Few artificial barriers to entry

Slight control over price

Differentiated products

Perfect (Pure) Competition:

Many Buyers and Sellers

Identical Products

Informed Buyers and Sellers

Free Market Entry and Exit