THE MARKET AND COMPETITION

Not all markets work the same; That is why we say that there are
different market forms, which affect the ability of each company
to set prices. The main characteristics that determine these
forms are: a) the number of sellers; b) the number of buyers; c)
the extent to which the products of different sellers differ from
each other.

PERFECT MONOPOLY MARKET

COMPETITION OLIGOPOLY MARKET MONOPSONY MARKET OLIGOPSONY MARKET

This occurs when there are A single company determines the
many sellers of almost identical value of the entire market and
almost supplies it completely.
products. Because so many
Sounds familiar? This lack of
companies sell similar
consumer choice generally
products, substitutes are
results in high prices. Generally a
available to consumers. Prices
monopolized market has too high
are controlled by supply and
demand , and they also tend to a barrier to entry for other
be low. companies to compete.
An oligopoly is a market in which
there are more than two
competitors, but no more than a
handful. In these, all companies
run the risk of entering into a price
war. This clearly constitutes an
exercise that is detrimental to
companies and sometimes
advantageous to users.
It is an exceptional situation
where the consumer can influence in which there are few
the final price of a product . Its buyers, and each of them
leading role allows it to make participates in a significant
decisions in the market, changing amount of the total
or influencing the rules of the purchases.
game.

EXAMPLE EXAMPLE EXAMPLE

EXAMPLE EXAMPLE

The rice produced by the

companies is exactly the same,
so consumers do not lean
towards one brand or another.
responsible for providing the
In this way, supply and demand
are constant and the price is
always the same, that is, there
is an equilibrium.
Telecommunications companies AKI Supermarkets
In public works, the State is the
such as Claro, Movistar, Cnt, offer
CNEL company, which is only buyer compared to several
similar products but with different Large supermarkets that buy
construction firms that offer their
prices to win customers in the from small producers.
services.
country's electrical energy. market.