A Website With A Wide Variety Of Information

In microeconomics, there are four major market structures. These are the monopoly, the oligopoly, monopolistic competition and perfect competition.

In a monopoly, a long term economic profit is possible. There are no identical products or close substitutes. The monopoly has the power to control prices as well as supply. Some of the ways a monoploy might become possible are controlling a valuable resource without competition, merging with a competitor or being allowed by the government.

Oligopolies consist of just a few sellers but they have considerable market power and can affect prices and supply. They can make an economic profit over the long run.

While there are many sellers in monopolistic competition, the products they sell are varied and differentiated. They have just enough economic power to cause price differences. Over the long term they only realize a normal economic profit.

In perfect competition, there are a large number of sellers in the market. No single seller has the power to set prices or control the supply. The product in a perfectly competitive market is the same for all market participants. In addition, the price is the same for all sellers and buyers.