Compare and Contrast: Market Structures
Monopoly Market Structure
Description: A monopoly is a market structure with only one seller for a particular product
Advantages for Consumers: Less waste, better investments, and lots of investments in technology.
Disadvantages for Consumers: High prices for lower quality products, and bad service.
Amount of competition: There is no competition in a monopoly market structure.
Examples of a Monopoly Market Structure
There are now many laws in place to prevent monopolies. However, in the past, there are lots of examples of monopolies. Here are a few:
1. Standard Oil: 1882-1909
2. U.S. Steel: 1901-1911
3. American Telephone and Telegraph (AT&T): 1907-1918
Oligopoly Market Structure
Description: Oligopoly is a market structure where very few large sellers dominate the industry
Amount of competition: Oligopolies have very little price competition, but lots of non-price competition, such as when new features are added to the product.
Advantages for consumers: Prices tend to be pretty much the same all around and products are always improving.
Disadvantages for consumers:
Prices rarely go down, and limited choices in what you can buy.
Examples of an Oligopoly
Some examples of Oligopolies include:
1. Car companies (Ford, Honda, Toyota, etc)
2. Fast Food Restaurants (McDonald's, Chick-fil-a, Sonic, etc)
3. Airline companies (Spirit, Delta, United, etc)
Comparisons
Monopolies and Oligopolies are similar in a few ways. They both limit the number of similar products available on the market. Another way they are similar is the fact that neither of them have any price competition, which means that the businesses have almost complete control over the price they charge for their products.
Sources
1. http://kevinonthestreet.com/wp-content/uploads/2014/03/market-structure.jpg
2. http://www.therichest.com/business/companies-business/six-enormous-monopolies-past-and-present/
3. http://lh6.ggpht.com/_iFIztPmvqg8/TNmOvrny5mI/AAAAAAAADr4/g0KHmUNDrM0/Monopoly-Market-Structure-Meaning-Features-Types.jpg
4. https://image.slidesharecdn.com/econoligopoly-150805043647-lva1-app6891/95/econ-oligopoly-12-638.jpg?cb=1438749527
5. http://0104.nccdn.net/1_5/31f/198/253/market5.jpg
6. Chapter 7 of Economics Textbook