Classification of market on the basis of degree of competition | Agriculture Exams Library
Classification of market on the basis of degree of competition
1. Perfect market: The perfect market is one where there are a large number of buyers and sellers having perfect knowledge of demand, supply and prices.
2. Imperfect market: The market in which the conditions of perfect competition are lacking are characterised as imperfect market. The following situations, each based on the degree of imperfections, may be identified.
a. Monopoly market: Monopoly is a market situation in which there is only one seller of a commodity. When there is only one buyer of a product, the market is termed as a monopsony market.
b. Duopoly market: A duopoly market is one which has only two sellers of a commodity. The market situation in which there are only two buyers of a commodity is known as duopsony market.
c.Oligopoly market: Market in which there are more than two but still a few sellers of a commodity is termed as an oligopoly market. A market having a few (more than two buyers is known as oligopsony market.
d. Monopolistic competition: When a large number of sellers deal in heterogeneous and differentiated form of a commodity, the situation is called monopolistic competition. Ex. Choice between various makes of insecticides, fertilizers and equipments.
