Market Structures

The Marketplace

A Place where”Buyers” and Sellers meet to have an Exchange. (Whether this is Physical or Online Store)

Marketplace Physical

There is a literal place and location where buyers and sellers can transact over goods.

Marketplace Online

With the use of technology - The Marketplace was able to evolve over time.

The Main Challenges of anyone doing transaction? (Pricing)

At what price I am going to sell

The Main Challenges of anyone doing transaction? (Demand)

Is someone going to buy my products?

The Main Challenges of anyone doing transaction? (Competition)

Perfect Competition

is an economic term that refers to a theoretical market structure in which all suppliers are equal and overall supply and demand are in equilibrium.

For example, if there are several firms producing a commodity and no individual firm has a competitive advantage, there is perfect competition.

Perfect Competition (Homogenous products)

In perfect competition, all firms produce the same product, making it a commodity.

Perfect Competition (Price Takers)

The market price is equal to the marginal cost of production, and no single firm has the power to charge more

Perfect Competition (Profitability)

Producers entering the market bring down the demand curve

Perfect Competition (Free Entry)

There are no barriers to entry or exit in a perfect competition

Perfect Competition (Rational Buyers)

In this theoretical market, all buyers make rational purchases to maximize their economic utility and seek a lower price.

Perfect Competition (Regulation)

There is no need for government licensing or regulation.

Farmer’s Market

Small producers sell nearly identical products for very similar prices. The entry and exit of some vendors does not change the overall marketplace, and the prices and product information is clear and fairly uniform.

Monopolistic Competition

Many firms offer products or services that are similar (But not perfect) substitutes. a type of market structure where many companies are present in an industry, and they produce similar but differentiated products.

Monopoly

a single seller or producer without direct competitors for its products or services due to its business practices. A monopoly can dictate price