The market is relatively clustered with buyer and sellers empowered by the price fortitude and cavalry competition that facilitates the hope and faith of their existence and survival. The market is run by its odds and even of how it is regulated in terms of their resources, economies of sales, number of companies and firms operating in that particular industry and product differentiation (Sexton, p. 401). The market structures categorize according to the competitive edge of any industry in relation to any barriers of entry or exist and the bargaining power of suppliers or customers.
Monopoly market is like a superhero that not only influence and control the market but also restricts the entry of new firms or products to penetrate in its kingdom. The bargaining power of the firms regulates the unique product, price determination and even the quantity of units produced. It indicates the monopoly power and the aura of profit maximization that flourished different firms in particular industries for years e. g. Dee Beers diamond market monopoly (Sexton, p. 401). The Oligopoly market (Mankiw, p. 347) is a joint kingdom of different firms enjoying monopolistic power by dominating the market with fierce competition.
It creates barrier for new entrants and their weapon is branding and value added features to their product eradicating the price wars. The important feature of such market is the collusion of different firms operating in the market to void the competition and control the market with a semi constant price. It pressurized the market to declare it as illegal and against the competition law e. g. Transatlantic Airlines (Mankiw, p. 347). The another competitive market is the Monopolistic market that facilitates large number of buyers producing distinct products but have an advantage of easy and free exist and entry to the market.
There is no market domination by price or brand by any firm but they compete against each other for innovation in their product and their strategies of marketing to the end customers (Mankiw, pp. 346-349). The demand and resources are higher as compared to monopolist or oligopoly markets as if the firm incurs losses it will have an easy exit out of the industry and if its profitable than it could flourish in the long run e.
g. Food manufacturer companies, such as Kraft Foods etc. The perfect competitive market comprises of different buyers and customers whom dominate the market either by price or by neither product nor do they create any barriers or rivalry for new entrants. It practice it cannot be achieved as any market in the world is not regulated without the intervention of government regulations and positive symmetrical information regarding the market conditions (Mankiw, pp. 346-349). To conclude, Oligopoly competitive market is conserve as it has an advantage of collusion between the perfection and monopolist market due to its ubiquitous structure.
The challenge is the strategic planning of different firms to countermoves the players in the market (Osborne, pp. 151-159). In practical real life, there are striking examples of countries regulated by oligopoly structures such as one big firms sets the price and brings the innovation in the product features, which is copied by all the firms operating in that sector. Economists have argued over the oligopoly structure by application of Nash equilibrium and Game theory, which indicated numerous ‘Tit for Tat’ theories, such as price wars or aggressive marketing of their product by counter attacking their rivals in the market without any formal agreement (Osborne, pp.
151-159). The future of oligopoly market is widen as many monopolistic are switching and it is due to the globalization of different markets and various suppliers, abrupt technological changes and anti trust laws that controls the fierce competitions between the firms and also deflects the harmful mergers due to collisions of different firms (Sexton, p.444). Work Cited Mankiw, N.
Gregory. Principles of Economics. Cengage Learning, 2008. Martin, J. Osborne. An Introduction to Game Theory. Oxford University Press, 2002. Sexton, L. Robert. Exploring Economics. Cengage Learning, 2010.