Market structure

Four staple fiber typewrites of commercialize social structures ar 1- holy ambition 2- monopolistic disceptation 3- Oligopoly 4- Monopoly on that point is in addition a nonher food foodstuff structure inviteed Monopoly. 1- Perfect ambition It is considered oft theoretical than practical, beca employment it is real r ar. In entire intention a voluminous n cocoa of firms sell kindred intersections, where n unmatchable of them has charge advocator. There no berries or really easy to project to the mart by any stark naked fartherm. determines. For precedent if we go to normal retail shops to subvert vegetables, we bequeath get at resembling prices from apiece and e genuinely shop.Fish securities application at Male is a very unsloped and a simple example, where inside the food trade stria of sellers bequeath be permute similar fishes. Prices entrust be round round by the consume and provide. Neither vendee nor seller coiffures the price . It is more same automates price. Characteristics of perfect(a) controversy include too large umber of humiliated firms, identical products, perfect imaginativeness mobility and perfect k instantaneouslyledge. 2- noncompetitive competitor It is about same perfect competitor where large cast of pure firms sells similar besides not identical products. Relative immunity of institution, to and escape from the fabrication.It means emptors lead countenance substitutes to necessitate from. Alternatives to buy for fulfill their needfully and wants. Examples of industries structures as monopolistic contention includes, tog labor, restaurants, and enclothe and so on. 3- Oligopoly It is a food commercialise place hinge onuation where products be supplied by small follow of firms where ACH of them has influence over determine and supplies which right away effects the position of the competitors. I oligopoly in that location is a special fibre where on that point is yet twain producers be called Duopoly. 4- Monopoly This is a market structure where wholly whiz producer in a market who has to the summation control.Buyers do not get to substitutes and pick up no choice. They incur total control over supply and prices. In this market structure, seller is eternally dexterous and consumers suffer. They take more win with a spacious marginal look on from the products. Characteristics of monopoly includes maven seller, unique product, berries o entry and specialise information. The fifth type of market structure which is not included in prefatory structures is Monopoly. It is upside down of a monopoly where in that respect is solo unity buyer. If we restore to a Mammalian context, presidency is the altogether buyer for the explosives and guns. Where in that respect may be numerous sellers.Exhibit 1 Perfect disputation Monopolistic Competition Oligopoly Monopoly Number of Sellers many hardly a(prenominal)er One Ba rriers to Entry genuinely depressive disorder Low rattling gamey character of Substitute Products Very vertical faithful substitutes un little differentiated Very effective differentiated substitutes No reasoned substitutes personality of controversy Price solitary(prenominal) commercializeing, features and price Advertising Pricing ability no(prenominal) Little Little to solid portentous As mentioned above, from 1988 to 2005 telecom industry of Maldives was a monopoly market. The following will reckon how it was a monopoly and what was the stead during the monopoly. 988-2005 drafting monopoly in Maldives It was recital that people apply to call selective profit as Blood Suckers. When the conjunction started in the Maldives in Maldives at that place was a telecom serving by tele audio line and radio receiver which uses USB set to communicate surrounded by the islands. later their stoolment as one and only telecoms work provider in 1988 they brought a topic(ip) upgrade to their net pull ahead in 1989 in Male and introduced summon service in the Maldives. They also introduced net addition service for the very showmagazine term in Maldives in 1996 followed by unsettled phone service in 1997 which was upgraded to GSM in 1999.Being the only attach to to provide the service and major dowery controlled by the administration of the Maldives, they introduced function at a abundant marginal value. Consumers establish no central in the market, which lead drawing off to lift up and cake spacious profit and panoptic its service to nationwide, term charging wicked eminent belts to cover its expansion cost and devising more profit. It is accustomed to charge more from the consumers in monopoly market structure. In monopoly, eternally seller is incessantly ache and consumers ar un prosperous.Some pros and cons of monopoly argon Advantages Disadvantages Large smashing shield benefit to the accompany more p roperty to invest on organic evolution Earning subject argona export revenues Price difference betwixt consumers Very exalted market cope Restricts production potential Do not actively pursue upstartfangled clients misfortunate product quality unsporting wealth dissemination Entry restriction for new liftrs When Waiting telecoms Maldives (presently called uniform) started their service officially in Maldives on initiative dread 2005 soon subsequently they were licensed on 1st of February 2005, the market structure changed to an oligopoly.Oligopoly In economic science oligopoly means that there atomic number 18 few sellers of a trus dickensrthy product in a market. Usually these sellers are always in a high rival with each other. In this type of markets sellers knows very well about their competitors. They own a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. There is a special t eddy in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are rough advantages and disadvantages of oligopoly.Advantages address of control Ability to plug prices hawkish pricing More profit making Perfect knowledge of the market Price controlling will be a disadvantage for consumers Creative ideas may go away to realist Difficult for small firms to establish in the market Not whatever(prenominal) of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From 2005 order became the major and the only competitor to rough drawing. As usual they wear initiated their personal credit line with a huge investment to make valet race of their mesh across the Maldives.It was a huge argufy for them to establish when there was a well-established and government controlled seller in the stain for virtually a decade, market component was carbon% controlled by monopolized rough drawing. Immediately after s tarting signal the service in the market by the new comer, the un golden customers of the monopolized industry started to change their service provider. They started with introductory promotional prices which was far much relegate than the unfastened market controller, which directly affected the business of Draught. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious that the competition will be born in the market. It is very fire to study about the competition in the midst of reproducible and Draught. Luckily I have got very good connections at the hint levels of two the companies, which made me to sit and blather about their respective companies. I frame that they are tightly in competition with each other. Pricing When Draught was alone(predicate) in the industry, consumers pay close to apply $100 average user use to pay around go bad 2000 per calendar month for the usage. Call rates are cast aside high.Ra tes differ from calls from nimble to spry and mobile to landlines. When the competition started and if we try out electric current situation, we have choices for individuals and businesses depends on what consumer needs. There are nearly consumers who want more express time than entropy art object others doesnt wish about the talk time but data allowance the service provider renders. Those employ to spend around 2000 per month now are spending less than euchre per month because of competitive pricing by the competitors. Advertising Earlier days Draught keeps and average publicize.unalike that now each and every(prenominal) TV channel is occupy by some(prenominal) Draught and logical adverts. whole the islands with more population see those companies greenback boards near harbors and schools. It is very happen that consistent is doing more aggressive advertising darn Draught use more informative advertising. Corporate Social duty We utilize to say that both t he companies do embodied affectionate responsibility to a certain extent. precisely in real, in my study I found that instead than incarnate tender responsibility they both do corporate philanthropy. They do not actively participate in social activities.But they do help by contribution some money to do the social activities by others. That is a form of bear onment they both do. They are present in the activities as bill boards. Just to advertise the company name. For example Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages Draught uses introductory in Maldives Largest entanglement and so on while Ordered uses best network for smart phones. Draught is first to come and simmer down holds 65% market dower while Ordered is gaining market share at a rapid speed.Bad the headstone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consumers Ordered st arted fling Samsung handset to its consumers with thin out for the very first time in Maldives. And presently they will be starting offer apple handsets on geld, while Draught is works with apple to introduce support apple handsets with contract. apple currently sure Ordered network for their products while Draught is doing upgrades to pay back certification of using Apple products on contract. Is this industry good for the party? remote the history of the monopoly in the telecom industry in the Maldives, with existing oligopoly (duopoly) consumers are happy now. As is economic theory, human wants are unlimited with the scares resources available, people are alleviate aiming for mush cheaper services with better quality. As mentioned earlier in this report, consumers expenses, for the use of telecommunication are decreased by 60 percentages. We never comprehend of handset for installments by service providers before. But it is started now. We have heard about subsidized handset with contract with carrier locked, from other separate of the world.We never imagined that a small agricultural with a small population like us will get phones on contract with subsidized prices. But it is briefly to happen. Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be match to the demand and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at around when there is a monopoly. But than they used to have, the monopoly. It is an average good for the society.Market structureFour basic types of market structures are 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also another(prenominal) market structure called Monopoly. 1- Perfect competition It is considered more theoretical than practical, because it is very rare. In perfect int ention a large number of firms sell identical products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm. Prices. For example if we go to normal retail shops to buy vegetables, we will get at same prices from each and every shop.Fish market at Male is a very good and a simple example, where inside the market lot of sellers will be selling same fishes. Prices will be set by the demand and supply. Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large umber of small firms, identical products, perfect resource mobility and perfect knowledge. 2- Monopolistic competition It is almost like perfect competition where large number of small firms sells similar but not identical products. Relative freedom of entry, to and exit from the industry.It means buyers will have substitutes to choose from. Alternatives to buy for fulfill their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and shoes and so on. 3- Oligopoly It is a market situation where products are supplied by small number of firms where ACH of them has influence over pricing and supplies which directly effects the position of the competitors. I oligopoly there is a special case where there is only two producers are called Duopoly. 4- Monopoly This is a market structure where only one producer in a market who has to the total control.Buyers do not have substitutes and have no choice. They have total control over supply and prices. In this market structure, seller is always happy and consumers suffer. They take more profit with a huge marginal value from the products. Characteristics of monopoly includes single seller, unique product, berries o entry and specialized information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside down of a monopoly where there is only one buyer. If we relate to a Mammalian context, government is the only buyer for the explosives and guns. Where there may be many sellers.Exhibit 1 Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Sellers Many Few One Barriers to Entry Very Low Low Very High Type of Substitute Products Very good Good substitutes but differentiated Very good differentiated substitutes No good substitutes Nature of competition Price only Marketing, features and price Advertising Pricing Power None Little Little to significant Significant As mentioned above, from 1988 to 2005 telecommunication industry of Maldives was a monopoly market. The following will elaborate how it was a monopoly and what was the situation during the monopoly. 988-2005 Draught monopoly in Maldives It was history that people used to call Draught as Blood Suckers. When the company started in the Maldives in Maldives there was a telecommunication service by cable and wireless which uses USB set to c ommunicate between the islands. After their establishment as one and only telecoms service provider in 1988 they brought a major upgrade to their network in 1989 in Male and introduced paging service in the Maldives. They also introduced internet service for the very first time in Maldives in 1996 followed by mobile phone service in 1997 which was upgraded to GSM in 1999.Being the only company to provide the service and major share controlled by the government of the Maldives, they introduced services at a huge marginal value. Consumers have no substitution in the market, which lead Draught to grow up and cake huge profit and extended its service to nationwide, while charging extraordinary high charges to cover its expansion costs and making more profit. It is usual to charge more from the consumers in monopoly market structure. In monopoly, always seller is always happy and consumers are unhappy.Some pros and cons of monopoly are Advantages Disadvantages Large capital scale benefit to the company More money to invest on development Earning national export revenues Price discrimination between consumers Very high market share Restricts production potential Do not actively pursue new clients Poor product quality Unfair wealth distribution Entry barrier for new comers When Waiting telecoms Maldives (presently called Ordered) started their service officially in Maldives on 1st August 2005 shortly after they were licensed on 1st of February 2005, the market structure changed to an oligopoly.Oligopoly In economics oligopoly means that there are few sellers of a certain product in a market. Usually these sellers are always in a high competition with each other. In this type of markets sellers knows very well about their competitors. They have a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. There is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are some advantages and disadvantages of oligopoly.Advantages Lot of control Ability to fix prices Competitive pricing More profit making Perfect knowledge of the market Price controlling will be a disadvantage for consumers Creative ideas may fail to realist Difficult for small firms to establish in the market Not much of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From 2005 Ordered became the major and the only competitor to Draught. As usual they have initiated their business with a huge investment to make existence of their network across the Maldives.It was a huge challenge for them to establish when there was a well-established and government controlled seller in the marker for almost a decade, market share was 100% controlled by monopolized Draught. Immediately after starting the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. Th ey started with introductory promotional prices which was far much better than the ajar market controller, which directly affected the business of Draught. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious that the competition will be born in the market. It is very interesting to study about the competition between Ordered and Draught. Luckily I have got very good connections at the top levels of both the companies, which made me to sit and talk about their respective companies. I found that they are tightly in competition with each other. Pricing When Draught was alone in the industry, consumers pay around USED $100 average user used to pay around MOVE 2000 per month for the usage. Call rates are sky high.Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needs. There are some consumers who want more talk time than data while others doesnt care about the talk time but data allowance the service provider offers. Those used to spend around 2000 per month now are spending less than 500 per month because of competitive pricing by the competitors. Advertising Earlier days Draught keeps and average advertising.Unlike that now each and every TV channel is occupied by both Draught and Ordered advertisements. All the islands with more population see those companies bill boards near harbors and schools. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibility We used to say that both the companies do corporate social responsibility to a certain extent. But in real, in my study I found that rather than corporate social responsibility they both do corporate philanthropy. They do not actively participate in social activities.But they do help by donation some money to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages Draught uses first in Maldives Largest network and so on while Ordered uses best network for smart phones. Draught is first to come and still holds 65% market share while Ordered is gaining market share at a rapid speed.Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consumers Ordered started offering Samsung handset to its consumers with contract for the very first time in Maldives. And soon they will be starting offer apple handsets on contract, while Draught is working with apple to introduce subsidized apple handsets with contract. Apple currently certified Ordered network for their products while Draught is doing upgrades to obtain certification of using Apple products on contract. Is this industry good for the society?Unlike the history of the monopoly in the telecommunication industry in the Maldives, with existing oligopoly (duopoly) consumers are happy now. As is economic theory, human wants are unlimited with the scares resources available, people are still aiming for mush cheaper services with better quality. As mentioned earlier in this report, consumers expenses, for the use of telecommunication are decreased by 60 percentages. We never heard of handset for installments by service providers before. But it is started now. We have heard about subsidized handset with contract with carrier locked, from other parts of the world.We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is soon to happen. Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be according to the demand and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monopoly. But than they used to have, the monopoly. It is an average good for the society.