• a.

pure competition (atomized competition, price

taker, freedom of entry & exit, no nonprice
competition, standardized product)

• b. pure monopoly (one seller, price giver, entry & exit

blocked, unique product, nonprice competition)

• c. monopolistic competition (large number of

independent sellers, pricing policies, entry difficult,
nonprice competition, product differentiation)

• d. oligopoly (very few number of sellers, often collude,

often price leadership, entry difficult, nonprice
competition, product differentiation)
• a. large number of agents there is atomized
competition (a large number of very small
suppliers and buyers relative to the market),
• b. standardized product suppliers offer a
standardized product,
• c. no non-price competition (there is no nonprice
competition)
• d. freedom of entry & exit there is complete
freedom of entry and exit into and from this
market
• e. price taker (firms in this industry must accept
the price determined in the industry)
• a. single seller (there is one seller that supplies a
large number of independent buyers)
• b. no close substitutes (the firm offers unique
product)
• c. price giver (this firm is a constrained price
dictator)
• d. blocked entry (entry and exit into this market
is completely blocked)
• e. non-price competition (there is nonprice
competition) (mostly public information
advertising),
• including public utilities and manufacturing
• firms producing products protected from
competition by patents or copyrights. A
• monopolist will produce less than a
competitive industry and charge a higher
price,
• ceteris paribus.
• large number of independent sellers, (1) a relatively
small number of sellers compared to pure
competition, but this number can still be large, in
some cases a few hundred independent sellers,

• pricing policies, (2) pricing policies exist in these firms,

• entry difficult, entry into this market is generally

somewhat difficult,

• nonprice competition, (4) there is substantial nonprice

competition,

• product differentiation (5) mostly designed to create

product differentiation, at least some of which is
spurious.
• computer manufacturers, software
manufacturers, most retail industries, and
liquor distillers. In general, monopolistic
competitors produce less than ure
competitors but more that pure monopolists
• often collude,, often spurious.

• very few number of sellers (1) that there are few sellers
(generally a dozen or less), these firms often collude or
implicitly cooperate through such practices as price
leadership,

• entry difficult(2) entry into this market is generally

difficult,

• nonprice competition, product differentiation, often

price leadership (3) there is normally very intensive
non price competition in an attempt to create product
differentiation,
 Types of Imperfectly Competitive
Markets

Oligopoly
 Onlya few sellers, each offering a similar
or identical product to the others.
Monopolistic Competition
 Many firms selling products that are
similar but not identical.
Characteristics of an Oligopoly Market

Few sellers offering similar or identical

products
Interdependent firms
They are best off cooperating and acting
like a monopolist by producing a small
quantity of output and charging a price
above marginal cost.
 Markets With Only a Few Sellers

Because of there being few sellers, the key

features of oligopoly are the
interdependence between firms and the
resulting tension between cooperation
and self-interest.
• automobile industry, the soft-drink
• industry, the brewing industry, segments of
the fast-food industry, and airplane
• manufacturers.CX`