Nature of Competition in Business MONOPOLY OLIGOPOLY MONOPOLISTIC COMPETITION PURE COMPETITION

updated 2008 Sept 02
this page is for marketing students of Prof. Tim Richardson
 
 

Pure Competition - low barriers to entry, many choices, no business has dominance

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- many companies competing and nobody has a significant advantage examples small bars and restaurants variety stores, convenience stores nail salons, barbers small grocery stores doughnut shops professional services (dentist, doctor, architects)

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Oligopoly - very similar products, few sellers, small firms follow lead of big firms, fairly inelastic demand

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- many barriers to establishing a business so only the oldest and biggest businesses are operating examples - all the businesses are big and of equal size banking industry automotive manufacturers gasoline retail companies insurance companies telecommunications companies

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Monopoly - one single large seller with no close competition and no alternate substitutes examples

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- the definition of a Monopoly, some say, is that it is bigger than all other competition combined software companies like Microsoft local telephone in Canada (Bell) Hydro services LCBO Canada Post

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Monopolistic Competition - sellers feel they do have some competition

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- there is one big company dominating the market with a few medium or smaller sized companies examples Google (there used to be "pure competition" until Google grew very big and became dominant) Walmart

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