Monopolistic Competition Market بازار رقابت انحصاری

Monopolistic Competition Market

Monopolistic Competition Market

A monopolistic competition market is a type of market in which we face many producers and suppliers who offer a specific type of product. In other words, in this type of market, every seller is the exclusive supplier of a certain product, which, along with this monopoly, also has competitors by its side. The products that are offered in the market of exclusive competition, while they are similar to each other, also have distinctive features in terms of quality, packaging, brand, etc.

In this market, temporarily and in a short period of time, a company can act as a monopoly and achieve a significant economic profit. But in the future, with the entry of other companies and the creation of differentiation in the products, the formation of full competition will be provided, and it will not be possible to obtain the maximum economic profit.

In the monopolistic competition market, the price criterion for buyers is quality. It means that buyers compare the price of each product with their quality and then make a purchase. The conditions of entering this market are facing few obstacles. For this reason, new competitors are constantly entering the market. with the aim of preventing Mood companies from earning high profits and achieving large profits themselves.

Characteristics of the Monopolistic Competition Market

1. In this market, any supplier can proceed with specific policies determined by him/her. In other words, every company can increase the price of its products regardless of other competitors and the economy of the society.

2. On the other hand, in this market, customers have enough information about what products are offered in which places and what are the differences between them.

3. In this market, the products are similar to each other and can be substitutes, but they are different from each other in terms of price, quality, brand, etc.

4. In a competitive market, due to the differences between the products, it is possible for the buyer to buy from only one manufacturer. In other words, among different suppliers of similar products, there is only one seller who can satisfy the needs and wants of the buyer correctly and completely.

Monopolistic Competition Market بازار رقابت انحصاری
Competitive Market (C.M)

Multilateral Monopoly Market

Multilateral monopoly exists where we are faced with the dominance of a limited number of producers in a certain market or industry. In this situation, producers are aware of the programs and performance of other competitors. The decisions made by each of them will affect others. In a multilateral monopoly, sellers may take restrictive measures. Actions that result in limited production and an increase in prices.

Features of the Multilateral Monopoly Market

1. Unlike the competitive monopoly market, entry and exit in the multilateral monopoly market is associated with many obstacles such as high investment costs, advanced technology, etc.

2. The number of sellers and providers of goods in this market is limited. Therefore, the decisions and performance of each supplier can affect others. As a result of this, every seller must consider the performance of his/her competitors for any action in the market and take steps accordingly.

Monopolistic Competition Market بازار رقابت انحصاری
Multilateral Monopoly Market

Up To Sum

The market of monopolistic competition is one of the cases that we deal with in abundance. Among these markets, we can mention the center for providing skin care and cosmetic products. While there are similarities between the products offered in this market, the major differences between them cannot be denied. Differences such as brand, price, quality, etc., which directly affect the buyer’s decision.
At the heart of the monopolistic competition market, we have the multilateral monopoly market. In the multilateral monopoly market, unlike the monopoly competition market, we are faced with a limited number of sellers who can reduce production and increase prices by implementing the alliance and collusion system. On the other hand, due to the limited number of such sellers, the decisions and performance of each of them will affect other competitors.

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