Question

Name and describe the four types of markets as they relate to the competitive landscape, in particular the number and strength of competitors in the market. Discuss the challenges each of the four poses with respect to setting prices, and how marketers respond to the different challenges.

Answer 1

Four types of market:-

1. Monopoly :- One firm with pure monopoly

2. Oligopoly :- Few dominant firms

3. Monopolistic Competition :- Many competitors

4. Perfect Competition :- Many competitor

Pricing Power:-

1. Monopoly :- Significant Power

2. Oligopoly :- Little to Significant

3. Monopolistic Competition :- Little Power

4. Perfect Competition :- None

Barriers to entry:-

1. Monopoly :- Very high

2. Oligopoly :- high

3. Monopolistic Competition :- low

4. Perfect Competition :- very low

Nature of Competition:-

1. Monopoly :- Advertising

2. Oligopoly :- Marketing features and price

3. Monopolistic Competition :- Marketing features and price

4. Perfect Competition :- Price only