Types of Markets

Mind Map: Types of Markets

Central Idea

Types of Markets

Main Branches

1. Perfect Competition

• Characteristics

  • Many buyers and sellers

  • Homogeneous products

  • Free entry and exit

  • Perfect information

• Examples

  • Agricultural markets

  • Stock markets

2. Monopolistic Competition

• Characteristics

  • Many sellers

  • Differentiated products

  • Some control over prices

  • Relatively easy entry and exit

• Examples

  • Restaurants

  • Clothing brands

3. Oligopoly

• Characteristics

  • Few large sellers

  • Interdependent pricing

  • Barriers to entry

  • Potential for collusion

• Examples

  • Automobile industry

  • Airline industry

4. Monopoly

• Characteristics

  • Single seller

  • Unique product with no close substitutes

  • High barriers to entry

  • Price maker

• Examples

  • Utility companies

  • Pharmaceutical companies with patents

5. Contestable Market

• Characteristics

  • Potential competition

  • Low entry and exit costs

  • Threat of new entrants keeps prices in check

• Examples

  • Airlines in deregulated markets

  • Telecommunications

Summary

Understanding these market types helps analyze economic behavior, pricing strategies, and regulatory implications. Each market structure has unique characteristics that influence competition and consumer choice.