Question

Explain the difference between an open market, monopoly, duopoly and an oligopoly. Identify two monopolistic markets and two oligopolistic markets.

Answer 1

The main difference between open market, monopoly, duopoly and oligopolistic market is as follows. Open market is free of entry and exit, large no. Of buyers and sellers are there, firms are price takers and all firms produce homogeneous products with no close substitutes. In monopoly there is only one seller and many buyers. It sets it's own price, entry is prohibited here. In duopoly only two firms are there but buyers are large in no. Both the firms are inter dependent while fixing the price. In oligopoly few firms are there with similar products and close substitutes.Here no. Of buyers are large.

Two monopolistic market are- Sunsilk shampoo, and surfexcel detergent.

Two oligopolistic market are- cable television service provider, mobile phones market.