(855) 4-ESSAYS

Type a new keyword(s) and press Enter to search

Types of Business Competitions

            The basic types of competition are pure competition, monopolistic competition, oligopoly and monopoly. Pure competition is a situation where there are many buyers and sellers of a single product. In pure competition, no one has the power to affect the price of the product. Every seller asks for the same price that every other seller is asking. Government regulation is very limited. Pure competition is easy to enter and get out of. It's very rare to occur in today's world, but some specific markets such as farm products come close. .
             A monopolistic competition is similar to pure competition with the only difference being that in a monopolistic competition, each seller tries to add unique product features such as different services and packaging. Like pure competition, monopolistic competition is easy to enter and get out of. Product differentiation is the main attempt of businesses under monopolistic competition. Each business tries to make similar products different by altering them in a flashy way. Government regulation is minimal. The Hanes company uses these methods in order to make their products stand out from other products that are similar. .
             An oligopoly is a situation where there are few sellers that are quite large. Each seller has control over their prices. Product differentiation is the biggest weapon used because if one company reduces their prices, all other similar companies will as well. In order to enter an oligopolistic market, substantial investments are required. Also, some government regulation is present. The automobile industry is well known for being in the oligopolistic market. .
             A monopoly is a market with only one seller, in which that market has complete control over the price. Product differentiation is non existent because there is only one source available. The Government has much control over monopolies to make sure that no monopolies are formed other than natural monopolies and monopolies that are created by copyrights, patents and trademarks.

Essays Related to Types of Business Competitions

Got a writing question? Ask our professional writer!
Submit My Question