Imperfect Competition In an imperfect competition market, there are many sellers of a similar product.
In this type of market:
• There are many buyers and sellers. • The goods or services supplied by each seller are similar.
• Sellers try to make their goods and services stand out from competitors’ (e.g. attractive packaging, promotional offers).
• Consumers have a wide choice of goods. The imperfect market is the most common type of market.
Example
The cosmetics industry is made up of many brands offering similar products. Advertising plays a key role in attracting and enticing the consumer. Brands try to stand out with attractive packaging or special promotions.
Monopoly In a monopoly market, there is only one seller of a product.
In this type of market:
• There is one provider of a good or service. • There are barriers to entering into the market (e.g. it would be extremely expensive for private enterprise to set up a railway system).
• Sellers may increase prices as they have no competition.
• Sellers may have low profit margins for the public good (e.g. a state-sponsored body may offer a rural bus service even though it makes little profit).
• Employees generally benefit from good conditions and job security. 350
