Question

Essay Questions (marketing management)

6) Compare and contrast pure competition and oligopolistic competition.

Answer 1

Under pure competition market, market consists of many buyers and sellers trading uniform products at a Market price determined by consumer demand. No single buyer or seller has control over market price. Since, there are many buyers and sellers in the market, there is little competition. Firms under this market are all price takers.

Under oligopolistic competition, the market consists of only a few large seller or small number of sellers offer product at comparable price level. In this market, firms have control over the market price of their product. In Oligopolistic competition, the  high barriers to entry and market is dominated by few firms.