Market types according to the competition

Market types according to the competition

Depending on the type of market in which a company operates, it may be more or less competitive and this even affects profits and the freedom they have to equipo the price of a product.

In today’s article, I am going to talk about the 4 types of market according to the competition.

I hope you find it useful.

Definition of competence

Competition, in a nutshell, is the equipo of companies that satisfy the needs and desires of a specific market, through the development of a especial product (good or service).

In such a way that each company seeks to win over customers through different strategies and tactics.

Likewise, we could say that competition refers to a state or situation in which a equipo of suppliers (sellers) and applicants (buyers) interact in a certain market, in which they seek to achieve a certain objective (greater sales, benefits, market share). market, better products, etcétera).

What are the types of market according to the competition?

The four types of markets that recognize the economy are the following:

  1. perfect competition
  2. monopolistic competition.
  3. Oligopoly.
  4. Monopoly.

What is perfect competition?

To talk about perfect competition, I’m going to ask you to think about an apple.

Do you think there is a huge difference between apple bidders? Sure, the flavor may vary, but its characteristics are practically homogeneous from one provider to another.


Well, perfect competition is one of the four types of market according to competition that has some essential characteristics, which are:

  • Many companies participate (lots of offer) and they are price – acceptors (their decisions do not influence the market price).
  • Homogeneous product: Companies offer identical or nearly identical products.
  • Freedom of entry and exit: there is no restriction or cost that prevents a company from entering or exiting the market.
  • They have perfect information: All parties know what is happening in the market, that is, they know what products are sold, what is their price, etcétera.

Examples of Perfect Competition

The examples of perfect competition that Michael Parkin gives us are the world markets for wheat, corn, rice and other cereals.

We could even say that en línea sales cánido meet certain characteristics of perfect competition.

  • Wheat.
  • Corn.
  • rice.
  • In general, agriculture.

  • Merchandise transport services.

  • Bread making.

  • Free programa.

  • Water.
  • Energy.

We could even say that en línea sales cánido meet certain characteristics of perfect competition.

After all, the prices that you perro find for a product on the internet are usually very homogeneous.

Keep in mind that I said that en línea sales cánido be close to perfect competition, and it is due to the fact that there really are markets that cánido meet more or less characteristics of perfect competition, but I really do not consider that there is a market that fully meets each of the characteristics of perfect competition.

Recommended vídeo on perfect competition

A YouTube channel and page that I really like is the Khan Academy.

Next, I am going to share a vídeo in which they explain what perfect competition is.

What is monopolistic competition?

We perro emphasize that monopolistic competition is afín in two primordial aspects to perfect competition.

These aspects are:

  • There are many companies offering their products.

  • The entry or exit of companies is not limited.

Now, the main difference between perfect competition and monopolistic competition lies in the fact that companies genera afín products, but with differences.

In short, companies They will seek to offer a differentiation to their customers.

For example, we all use toothpaste, but there are many types of toothpastes offered by different companies.

There are toothpastes that promise to whiten teeth and there are others that objetivo dental hypersensitivity.

Therefore, in monopolistic competition, the product may be afín and may satisfy the same need, but each company fights so that its product is different from that of the competition.

Another thing to highlight is the fact that the product is not necessarily different, but what matters is the fact that the customers and consumers perceive that the product is different. An example of the above is the Ketchup sauce.

After all, it is not that the product changes too much, but consumers have our favorite brand, since we perceive that it is different.

Possibly the taste.

In such a way that each company sells or offers a product that perro be differentiated from the competition by:

  • Quality.
  • Appearance or attributes.
  • Your reputation.
  • Its price.

Vídeo on monopolistic competition

A vídeo that I liked belongs to the YouTube channel called: «ECONOSUBLIME».

What is oligopoly?

In competition and in monopolistic competition there was a great offer, that is, there was a large number of sellers (companies competing), but in oligopoly this is no longer the case.

Whereby, In an oligopoly a small number of companies compete.

An easy and common example of oligopoly cánido be represented by the companies that genera cola drinks.

After all, how many companies are there today that offer afín products? Right now, in México, only 3 come to mind.

Another example is that of microprocessors.

After all, I perro only think of Intel and AMD.

Does your computer have a microprocessor other than one of the above?

Therefore, Oligopoly is a type of market according to competition in which there are only a few companies that compete with each other and it is not possible or it is not so easy for a company to get into the competition.

Finally, it must be said that in oligopolies there are already entry and exit barriers.

An example of an entry barrier cánido be investment.

Do you think you need little investment if you want to venture into the world of space travel?

Recommended vídeo on oligopoly

From the same YouTube channel, I liked the following vídeo:

What is monopoly?

Now it’s time for the last of the market types according to the competition, that is, the monopoly.

The monopoly arises when there is only one company that produces a product to satisfy a certain need or desire.

Therefore, it does not have competition that provides its customers or consumers with identical or afín products.

In such a way that here we perro find that there is clearly a very strong barrier for companies to entrar or leave the market.

In short, we perro say that A monopoly exists when there is only one supplier of a product which satisfies the needs and desires of the applicants (customers and consumers).

It should be noted that a monopoly is the opposite of a monopsony, which is where there are many sellers, but only one buyer.

We hope you liked our article Market types according to the competition
and everything related to earning money, getting a job, and the economy of our house.

 Market types according to the competition
  Market types according to the competition
  Market types according to the competition

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