Competition Note Guide
4016 Competition
Leanne Brown
Competition is:
When opposing businesses work to gain more customers.
3 types of competition
A.) Perfect Competition is when there are many businesses in the same market
competing. No one has control over the price in these markets, the price is set by
the market or it is the price consumers are willing to pay. An example is an
agricultural business
B.) Oligopoly competition is when there are a few sellers in a market. There are
usually only a few businesses in this competition because they are large and require
lots of money to start. An example is Airplane manufacturers
C.) Monopoly competition is when there is only one business selling in the market.
There are very few monopolies in the U.S., an example would be utility companies
Characteristics
Perfect
Competition
Many
Number of competitors
Ease of entry or exit from
Easy
industry
Similarity of
goods/services offered by Same
competing firms
Monopolistic
Competition
Few to many
Oligopoly
Monopoly
Very few
No direct competition
Regulated by U.S.
government
Somewhat difficult
Difficult
Seemingly different
but may be quite
similar
Similar or
different
No directly competing
products
Individual firm's control
over price
None (set by
the market)
Some
Some
Considerable (in true
monopoly) Little (in
regulated one)
Examples
Farmer
Fast-food restaurant
Automotive
manufacturer
Power company
Niche Market is when you have a unique business to your area. An example would
be a strawberry farm in this area.