Pure Competition
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Sometimes called perfect competition.
Many buyers and sellers.
Identical products.
Buyers and sellers are well informed about
products.
• Easy entry into the market for sellers.
• No control over prices. (Free market sets
the prices.)
Examples of Pure Competition
Monopolistic Competition
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Many Firms.
Few barriers to entry.
Slight control over Price.
Products are similar, but not identical.
– Physical characteristics
– Location
– Service Level
– Advertising, image, or status
Examples of Monopolistic
Competition
Oligopoly
• When the four largest firms produce at
least 70-80% of the output.
• A few firms dominate.
• Some variety of goods.
• Some control over prices.
• High barriers to entry.
Examples of an Oligopoly
Monopoly
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One Company.
No variety.
Complete Control over Prices.
Impossible to enter the market.
Examples of a Monopoly