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Competition in Markets . BTEC Business. Market Structures. Firms operate in markets. These are structured differently. We can look at three different types of market structure and find examples of each: monopoly duopoly oligopoly. Monopoly.
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Competition in Markets BTEC Business
Market Structures • Firms operate in markets. • These are structured differently. • We can look at three different types of market structure and find examples of each: • monopoly • duopoly • oligopoly
Monopoly • a market structure where there is a single seller of a unique product • no competition, as the firm = the market • potential for abuse of monopoly position • the market may be a natural monopoly • having competition amongst firms in this kind of market would be costly
Example of Monopoly • there may be significant savings to be had from having one company running the market • Network Rail are responsible for the maintenance and upgrading of the UK rail network • is it safer to have one company in charge?
Duopoly • two large producers or sellers • exactly two equally dominant firms seldom found • tend to compete or collude
Example of Duopoly • global aircraft market • two dominant firms are Airbus and Boeing • how do they compete with each other?
Oligopoly • markets dominated by a small number of large firms • the most common types of market • large firms are involved in selling either identical or very similar products • significant barriers to entry into the industry
Example of Oligopoly • the personal and domestic care product markets • dominated by: • Unilever • Procter and Gamble • Colgate-Palmolive