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Topic: Business
Give real life examples of a monopoly, perfect competition, oligopoly, monopolistic compitition and duopoly in India.
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That's quite a question you've got there!
Okay, here we go, in relation to India:
OLIGOPOLY: A situation where there are only a few sellers in a particular economy...
(The entire answer is 382 words.)
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Perfect competition is a concept used to explain some economic concepts, but it does not exist in real life anywhere. What does exits is a near perfect competition. Monopoly is, in a way, the opposite of perfect condition, in which a single firm or supplier has complete control over market prices and supplies. Oligiopoly is some thing in between perfect competition, where a few suppliers have some control over the market prices and supplies. However. this control is not complete control as enjoyed by monopolies.
I am not aware of a concept like "diopoly". Perhaps, it should have been spelt as duopoly, which refers to a special case of oligopoly with exactly two dominant suppliers in a market.
I am giving below examples of each of these types of market structures.
Situations like perfect market exists for markets for most of unbranded staple goods such as food grain and vegetables. However it should be noted that there is a trend of branding more and more of such goods also, and in this ways making their markets become more and more like oligopolistic markets.
Oligopolistic markets are most common form of markets we get to see today. One of the most fierce oligopolistic competition exists in the automobile industry across the world.
Duopolistic market with exactly two suppliers is not very common. However, there are number of products that have two dominant suppliers plus a few smaller ones. For example, in aerated soft drinks market, Coca Cola and Pepsi represent two dominant suppliers in many countries.
True Monopoly generally exist only in government controlled markets. For example provision of civic services such as sewage disposal is generally monopoly of local self government bodies such as municipal corporations. Railways is a government monopoly in India.
Monopoly in private business are rather rare, and even then they only approach monopolistic power bur are not perfect monopolies. As a matter of fact governments in many countries have special provisions to control monopolistic operation. For example, Microsoft which is considered a monopoly for operating system and some other software for personal computers is facing many litigation on the charge of following monopolistic practices.
Some times very small businesses are also able to enjoy monopolistic power because of their location and reputation. A hair stylist or fashion designer may enjoy such high reputation that many rich and the famous insist on using his or services. Also, a retail store with no other store in vicinity may enjoy a monopolistic advantage in that locality.
A monopoly is a market structure in which there is only one producer/seller for a product. In other words, the single business is the industry. Entry into such a market is restricted due to high costs or other impediments, which may be economic, social or political. For instance, a government can create a monopoly over an industry that it wants to control, such as electricity. Another reason for the barriers against entry into a monopolistic industry is that oftentimes, one entity has the exclusive rights to a natural resource. For example, in Saudi Arabia the government has sole control over the oil industry. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Pfizer, for instance, had a patent on Viagra.
In an oligopoly, there are only a few firms that make up an industry. This select group of firms has control over the price and, like a monopoly, an oligopoly has high barriers to entry. The products that the oligopolistic firms produce are often nearly identical and, therefore, the companies, which are competing for market share, are interdependent as a result of market forces. Assume, for example, that an economy needs only 100 widgets. Company X produces 50 widgets and its competitor, Company Y, produces the other 50. The prices of the two brands will be interdependent and, therefore, similar. So, if Company X starts selling the widgets at a lower price, it will get a greater market share, thereby forcing Company Y to lower its prices as well.
There are two extreme forms of market structure: monopoly and, its opposite, perfect competition. Perfect competition is characterized by many buyers and sellers, many products that are similar in nature and, as a result, many substitutes. Perfect competition means there are few, if any, barriers to entry for new companies, and prices are determined by supply and demand. Thus, producers in a perfectly competitive market are subject to the prices determined by the market and do not have any leverage. For example, in a perfectly competitive market, should a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, causing any firm that increases its prices to lose market share and profits.
Read more: http://wiki.answers.com/Q/Compare_monopoly_monopolistic_competition_perfect_competition_and_oligopoly#ixzz1dCUSUmyW
Monopoly: A single seller-large no of buyers, There is no alternate product.
Ex: Indian railways.
Duopoly: Two sellers shares the maximum market share
Ex: Pepsico and Coco-cola
Monopolistic: Exactly Opposite to monopoly. no of sellers produces a similar product.
Ex: Juice points, Hotels, Rice (Chawal) etc.
Perfect compitation: If large no of buyers, and large no of sellers present in a particular market area then it is called as perfect compitation.
Ex: We can see large no of sellers in a vegitable market. no of buyers come to the market and selects things whar ever they want.
Oligopoly: it is a market situation where the sellers command the over all industry to increse the product price ect. in oligopoly situatiuon the sellers produces an identical product like same features with same inputs.
Ex: Mobile networks like airtel, vodafone, Docomo ect.
Ex: Cement companies like: Jaypee, Birla cement, Nagarjuna cement ect are the identical product manufactured by producers. All the producers come together to take a decision about price of the product, and about the subsidaries from govt.
According to Milton Friedman, some kind of government subsidy is necessary for a product or service to maintain its monopoly position.
see Free to Choose by Milton and Rose Friedman
This book has had several editions. I think I read the 1981 edition.
KFC,fish market,kfc,automobile industry,pepsi and coco-cola
Monopoly: Not present in real terms, but if you see one geography there could be many examples as TATA steel in jamshedpur belt.
Btw Indian railways is an example of monopoly
Oligopoly: Soft drink, Pepsi vs Coke
Perfect Competition: aviation, all are free and almost equal.
Monopolistic competition: Credit card companies
Duopoly: Petroleum: HPCL and BPCl
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