Types of Market
Types of Market
To understand the market type is very important before you offer your products. Various important factors like demand, supply and pricing are influenced by market type. So let us see the types of market:
Perfect market: In the perfect market, there are infinite buyers and sellers. It is not possible for one single buyer or seller to influence the price. It is that type of market where entry and exit are easy. The malpractices and fluctuations in demand, supply and price will be minimal. When you offer new products, this type of market is easy to penetrate. All the firms sell identical products in this market.
Monopoly: In this type of market only one single seller will be there. He will use his position to take advantage of the price factor. The goods offered by Monopoly seller will not have any substitute also. The uniqueness of a product determines monopoly conditions. Once slowly competitors start selling similar products or alternatives the market no longer tends to be Monopoly. Here buyers will not be getting a variety of products. Thankfully cryptocurrency trading is not so tough like this. There are various apps like Bitcoin trader. A full review of the same is widely available so that user can choose what he likes.
Oligopoly: Here a handful of producers sell the products. They form a cartel among themselves and fix a higher price. It is a very tough market where unhealthy practices like hoarding are prevalent.
Monopolistic competition: It is a combination of Monopoly and Perfect market. There will be numerous players in the market and each will have his space. This is due to a few unique features in everyone’s product. This is called product differentiation. For example, take the field of Art. Every artist has his own style of painting a picture. Each style has few appreciators who show interest in buying those paintings. So, every artist has his own market. The monopolistic market is similar to that. If you can differentiate your products from that of similar sellers then you can perform well in this market.
Monopsony: Here there will be a single buyer who is strong enough to determine the prices though there will be a number of sellers. It is a tough market for your business to thrive since the buyer is the king in this market.
Besides the above types, the government also plays a role in price regulation. Hence analyze the market carefully and suitably change the product design before entering the market.