1. Marketing
Market type

2. E.G. closest to this is wheat in Canada
Perfect competition
Does not exist very often in practice
Market has large numbers of buyers & sellers -no one person can affect the market price
All product are homogenous - identical - so no need to advertise
perfect knowledge of the market exists for the buyer & the seller
it is possible to buy or sell any amount at the market price
easy to enter market
E.G. closest to this is wheat in Canada

3. Monopoly market
A pure monopoly exists if there is only one producer/seller
it is very difficult for producers to enter into the market because of various barriers
consumers have no choice in respect of prices, quality or services
cannot switch to a rival as there are none
competition commission set up to ensure fair practice

4. Origins of monopoly power
Natural - arising from geographical conditions of supply
E.G. gold South Africa
Historical - a business may have a monopoly because it was the first in the field
Capital size - a supply of a commodity may involve the use of vast amounts of capital - making it too expensive for new suppliers to enter the market
Technological - where there are many economies of scale to be gained it may be advantageous for the market to be supplied by one supplier
Legal - the government may confer a monopoly e.g. patent, copyright, exploration rights

5. business has the power to make prices when:-
Price making
business has the power to make prices when:-
then are a small number of competitors
monopolistic
few substitutes and demand is high
Price taking
market sets the price
competition e.g. fruits in season

6. Summary of different market types
Perfect competition
oligopoly
monopoly
“competition among the few”. Few sellers
limited entry
Non price competition
One seller
no entry
A large number of buyers and sellers
free entry
Market sets price
Sole seller may defend monopoly with advertising
Price maker
Homogenous product
advertising unnecessary because of perfect knowledge
Diminishing number of sellers more and more limitations to entry of new firms
Differentiated product and advertising