Market structure

cardinal basic types of securities industry structures ar 1- Perfect contention 2- Monopolistic contention 3- Oligopoly 4- Monopoly in that location is also a nonher(prenominal) food commercialize structure called Monopoly. 1- Perfect contention It is considered more than(prenominal)(prenominal) theoretical than practical, beca mannikin it is really r ar. In blame little(prenominal) plan a large tot of firms sell superposable products, where none of them has punctuate index finger. on that point no berries or truly easy to enter to the mart by any smart farm. Prices. For suit if we go to common retail shops to buy vegetables, we leave behind get at same prices from each and e precise shop.Fish market place at mannish is a very(prenominal) good and a transp bent example, where inside the market lot of traffickers tolerate be selling same fishes. Prices exit be array by the collect and supply. Neither emptor nor vender sets the price. It is more handle automates set. Characteristics of everlasting(a) ambition accommodate large umber of comminuted firms, equivalent products, finished resource mobility and arrant(a) knowledge. 2- Monopolistic tilt It is salubrious-nigh similar perfective tense contr everywheresy where large tally of miniscule firms sells similar solely non akin products. Relative freedom of entry, to and exit from the industry.It center emptors allow for have substitutes to choose from. Alternatives to buy for fulfill their ineluctably and wants. Examples of industries structures as monopolistic opposition involves, clothing industry, restaurants, and home and so on. 3- Oligopoly It is a market situation where products be supplied by small number of firms where ACH of them has influence all over pricing and supplies which directly effects the position of the contenders. I oligopoly in that respect is a special case where at that place is whole two producers atomic number 18 ca lled Duopoly. 4- Monopoly This is a market structure where scarcely one producer in a market who has to the summation control.Buyers do non have substitutes and have no choice. They have fargon control over supply and prices. In this market structure, seller is unceasingly happy and consumers suffer. They take more profit with a commodious b atomic number 18(a) none harbor from the products. Characteristics of monopoly includes single seller, unique product, berries o entry and specialize information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside devour of a monopoly where thither is besides one buyer. If we consult to a Mammalian context, authorities is the single buyer for the explosives and guns. Where on that point may be many sellers.Exhibit 1 Perfect Competition Monopolistic Competition Oligopoly Monopoly sum up of Sellers Many Few One Barriers to Entry actually Low Low real High image of Substitute Products Very good Good substitutes scarce differentiated Very good differentiated substitutes No good substitutes Nature of controversy Price only Marketing, features and price Advertising Pricing Power none Little Little to significant Significant As mentioned above, from 1988 to 2005 telecommunication industry of Maldives was a monopoly market. The following will elaborate how it was a monopoly and what was the situation during the monopoly. 988-2005 order of payment monopoly in Maldives It was account statement that people utilize to call gulping as Blood Suckers. When the guild started in the Maldives in Maldives thither was a telecommunication assist by cable and wireless which uses USB set to communicate among the islands. After their evincement as one and only telecoms receipts digestr in 1988 they brought a major upgrade to their lucre in 1989 in male and introduced paging improvement in the Maldives. They also introduced meshwork good for the very root age time in Maldives in 1996 followed by mobile phone service in 1997 which was upgraded to GSM in 1999.Being the only high society to provide the service and major piece of land controlled by the registerment of the Maldives, they introduced services at a colossal marginal value. Consumers have no substitution in the market, which make it enlist to grow up and cake huge profit and extended its service to nationwide, duration charging ridiculous juicyschool charges to cover its expansion costs and do more profit. It is usual to charge more from the consumers in monopoly market structure. In monopoly, ever seller is always happy and consumers ar unhappy.Some pros and cons of monopoly be Advantages Disadvantages Large bang-up scale benefit to the company More shoots to invest on development Earning national trade revenues Price discrimination surrounded by consumers Very high market tract Restricts production potential Do not actively pursue mod clients unworthy product quality Unfair wealth dissemination Entry barrier for new comers When Waiting telecoms Maldives (presently called tell) started their service officially in Maldives on initiative solemn 2005 shortly after they were licensed on initiatory of February 2005, the market structure changed to an oligopoly.Oligopoly In economics oligopoly convey that there argon few sellers of a indisputable product in a market. Usually these sellers atomic number 18 always in a high disceptation with each other. In this type of markets sellers knows very sanitary or so their enemys. They have a high strength to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. thither is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here be some advantages and disadvantages of oligopoly.Advantages Lot of control Ability to make prices Competitive pricing More profit make Perfect knowledge of the market Price overbearing will be a disadvantage for consumers imaginative ideas may fail to realist Difficult for small firms to feed in the market Not much of contest No fair wealth dissemination Oligopoly in Maldives telecoms industry From 2005 logical became the major and the only competitor to drawing off. As usual they have initiated their business with a huge investment to make existence of their web across the Maldives.It was a huge challenge for them to set when there was a well-established and government controlled seller in the marker for well-nigh a decade, market component part was 100% controlled by monopolized draft copy. Immediately after startle the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. They started with precedent promotional prices which was far much better than the open market controller, which directly affected the business of cons cription. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious that the competitor will be born in the market. It is very interesting to study to the highest degree the contender surrounded by Ordered and selective service. Luckily I have got very good connections at the top levels of twain the companies, which make me to sit and twaddleing to about their respective companies. I lay out that they are tightly in competition with each other. Pricing When gulping was alone in the industry, consumers pay nigh USED $100 just user utilise to pay well-nigh persist 2000 per month for the usage. Call rates are thrash about high.Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needfully. in that location are some consumers who want more talk time than data maculatio n others doesnt care about the talk time but data leeway the service provider offers. Those used to spend around 2000 per month now are spending less than 500 per month because of competitive pricing by the competitors. Advertising Earlier days Draught keeps and total advertising.Unlike that now each and every TV gestate is occupied by twain Draught and Ordered advertizements. All the islands with more population see those companies buck boards near harbors and schools. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibleness We used to say that both the companies do embodied social tariff to a authentic extent. entirely in real, in my study I plant that rather than bodied social responsibility they both do corporate philanthropy. They do not actively participate in social activities. tho they do service of process by donation some bullion to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages Draught uses showtime in Maldives Largest network and so on while Ordered uses best network for smart phones. Draught is first to come and inactive holds 65% market percent while Ordered is gaining market share at a rapid speed.Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consumers Ordered started offering Samsung handset to its consumers with twitch for the very first time in Maldives. And before long they will be start offer orchard orchard apple tree tree handsets on nip, while Draught is working with apple to introduce subsidized apple handsets with digest. Apple shortly certified Ordered network for their products while Draught i s doing upgrades to obtain certification of using Apple products on engender. Is this industry good for the society?Unlike the storey of the monopoly in the telecommunication industry in the Maldives, with alert oligopoly (duopoly) consumers are happy now. As is economic theory, kind wants are unlimited with the scares resources available, people are suave aiming for mush cheaper services with better quality. As mentioned former in this report, consumers expenses, for the use of telecommunication are fall by 60 percentages. We never perceive of handset for installments by service providers before. But it is started now. We have hear about subsidized handset with contract with attack aircraft postman locked, from other parts of the world.We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is before long to happen. Unlike perfect competition and monopolistic competition there are no much of selle rs. So competition and pricing of the products will not be according to the subscribe and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monopoly. But than they used to have, the monopoly. It is an medium good for the society.Market structure intravenous feeding basic types of market structures are 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also other market structure called Monopoly. 1- Perfect competition It is considered more theoretical than practical, because it is very rare. In perfect object a large number of firms sell very(a) products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm. Prices. For example if we go to natural retail shops to buy vegetables, we will get at same prices from each and every shop.Fish market at Male is a very good and a guileless example, where inside the market lot of sellers will be selling same fishes. Prices will be set by the demand and supply. Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large umber of small firms, identical products, perfect resource mobility and perfect knowledge. 2- Monopolistic competition It is almost like perfect competition where large number of small firms sells similar but not identical products. Relative freedom of entry, to and exit from the industry.It means buyers will have substitutes to choose from. Alternatives to buy for fulfill their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and stead and so on. 3- Oligopoly It is a market situation where products are supplied by small number of firms where ACH of them has influence over pricing and supplies which directly effects the position of the co mpetitors. I oligopoly there is a special case where there is only two producers are called Duopoly. 4- Monopoly This is a market structure where only one producer in a market who has to the total control.Buyers do not have substitutes and have no choice. They have total control over supply and prices. In this market structure, seller is always happy and consumers suffer. They take more profit with a huge marginal value from the products. Characteristics of monopoly includes single seller, unique product, berries o entry and specialize information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside bug out of a monopoly where there is only one buyer. If we meet to a Mammalian context, government is the only buyer for the explosives and guns. Where there may be many sellers.Exhibit 1 Perfect Competition Monopolistic Competition Oligopoly Monopoly routine of Sellers Many Few One Barriers to Entry Very Low Low Very High grammatic al case of Substitute Products Very good Good substitutes but differentiated Very good differentiated substitutes No good substitutes Nature of competition Price only Marketing, features and price Advertising Pricing Power none Little Little to significant Significant As mentioned above, from 1988 to 2005 telecommunication industry of Maldives was a monopoly market. The following will elaborate how it was a monopoly and what was the situation during the monopoly. 988-2005 Draught monopoly in Maldives It was history that people used to call Draught as Blood Suckers. When the company started in the Maldives in Maldives there was a telecommunication service by cable and wireless which uses USB set to communicate amidst the islands. After their establishment as one and only telecoms service provider in 1988 they brought a major upgrade to their network in 1989 in Male and introduced paging service in the Maldives. They also introduced network service for the very first time in Maldive s in 1996 followed by mobile phone service in 1997 which was upgraded to GSM in 1999.Being the only company to provide the service and major share controlled by the government of the Maldives, they introduced services at a huge marginal value. Consumers have no substitution in the market, which go on Draught to grow up and cake huge profit and extended its service to nationwide, while charging terrific high charges to cover its expansion costs and qualification more profit. It is usual to charge more from the consumers in monopoly market structure. In monopoly, always seller is always happy and consumers are unhappy.Some pros and cons of monopoly are Advantages Disadvantages Large uppercase scale benefit to the company More money to invest on development Earning national exporting revenues Price discrimination between consumers Very high market share Restricts production potential Do not actively pursue new clients ugly product quality Unfair wealth distribution Entry barrier for new comers When Waiting telecoms Maldives (presently called Ordered) started their service officially in Maldives on 1st idealistic 2005 shortly after they were licensed on 1st of February 2005, the market structure changed to an oligopoly.Oligopoly In economics oligopoly means that there are few sellers of a certain product in a market. Usually these sellers are always in a high competition with each other. In this type of markets sellers knows very well about their competitors. They have a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. There is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are some advantages and disadvantages of oligopoly.Advantages Lot of control Ability to assemble prices Competitive pricing More profit make Perfect knowledge of the market Price arrogant will be a disadvantage for consumers productive i deas may fail to realist Difficult for small firms to establish in the market Not much of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From 2005 Ordered became the major and the only competitor to Draught. As usual they have initiated their business with a huge investment to make existence of their network across the Maldives.It was a huge challenge for them to establish when there was a well-established and government controlled seller in the marker for almost a decade, market share was 100% controlled by monopolized Draught. Immediately after starting the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. They started with canonic promotional prices which was far much better than the open market controller, which directly affected the business of Draught. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious t hat the competition will be born in the market. It is very interesting to study about the competition between Ordered and Draught. Luckily I have got very good connections at the top levels of both the companies, which do me to sit and talk about their respective companies. I found that they are tightly in competition with each other. Pricing When Draught was alone in the industry, consumers pay around USED $100 come user used to pay around travel 2000 per month for the usage. Call rates are thrash high.Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needs. There are some consumers who want more talk time than data while others doesnt care about the talk time but data valuation account the service provider offers. Those used to spend around 2000 per month now are spending less than 500 per month because of competitive prici ng by the competitors. Advertising Earlier days Draught keeps and average advertising.Unlike that now each and every TV path is occupied by both Draught and Ordered advertisements. All the islands with more population see those companies bill boards near harbors and schools. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibility We used to say that both the companies do corporate social responsibility to a certain extent. But in real, in my study I found that rather than corporate social responsibility they both do corporate philanthropy. They do not actively participate in social activities.But they do attention by donation some money to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages Draught uses first in Maldives Largest network and so on while Ordered uses best network for smart phones. Draught is first to come and still holds 65% market share while Ordered is gaining market share at a rapid speed.Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consumers Ordered started offering Samsung handset to its consumers with contract for the very first time in Maldives. And soon they will be starting offer apple handsets on contract, while Draught is working with apple to introduce subsidized apple handsets with contract. Apple shortly certified Ordered network for their products while Draught is doing upgrades to obtain certification of using Apple products on contract. Is this industry good for the society?Unlike the history of the monopoly in the telecommunication industry in the Maldives, with existing oligopoly (duopoly) consumers are happy now . As is economic theory, tender wants are unlimited with the scares resources available, people are still aiming for mush cheaper services with better quality. As mentioned former in this report, consumers expenses, for the use of telecommunication are rock-bottom by 60 percentages. We never heard of handset for installments by service providers before. But it is started now. We have heard about subsidized handset with contract with carrier locked, from other parts of the world.We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is soon to happen. Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be according to the demand and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monop oly. But than they used to have, the monopoly. It is an average good for the society.