The Structure Of The Market

Market is an organized structure consisting of buyers and sellers, manufacturers of products (services) and their customers. Their interaction leads to the establishment of market prices.

The structure of the market is its most essential features, which include: the number of firms and their sizes, degree of difference or similarity of products, ease of entry into a particular market and exit, the availability of information. The ability to influence the formation and the level of prices depends on the structure of the market.

Market Structure exists in 4 forms:

- perfect competition. While there is a large number of small firms with homogeneous products. Entry and exit from the industry is not difficult, there is equal access to any information. The price is set by the market and the organization's role in its formation is small. Competitive structure of the market is the most developed, as supported by the state. Exists in several forms: functional competition, species and subject of competition.

- monopoly. There is one firm producing a unique product. Access to information is partially restricted, the market entry of other organizations is not possible. With this structure, the organization itself sets prices that are higher than they would be under perfect competition. The state seeks to pursue antitrust policy to foster competition in the sale of goods and provision of services. Monopolies exist in the following forms: closed, open and natural. First protected by legal prohibitions on competition. The second special defense is not. The third long-term average costs of the firm are minimal, if it serves the whole market.

Recommended

Staff evaluation: system and methods

Personnel Assessment allows you to identify how competent the employees involved in the enterprise, and it is the performance of their work – the most significant factor affecting the efficiency of the company. To clarify the impact of performa...

How to start your own business: important aspects.

Many people, tired of working for someone else, are increasingly thinking about how to start your own business. Someone wants to open a salon, someone store, and someone enough and vegetable stalls. Before you throw in the pool with his head, it is i...

Business activities. its essence and basic functions

The Entrepreneurial activity of the citizen – is undertaken at your own risk and independent activity, which aims to systematically profit through the sale of works, goods, services, use of the property. The citizen engaged in such activities, ...

- monopolistic competition. Such market structure exists in the form of many small firms. Products are heterogeneous. Entry and exit from the industry is not hampered and access to information is restricted partially.

- oligopoly. It operates a small number of large firms with homogeneous or heterogeneous products. You may have trouble at the exit of firms from the industry, access to information is restricted partially. Usually, the structure of the market from technically complex industries. For example, metallurgy, automotive, Aeronautics, chemistry, electronics.

The Number of firms of such a structure operating in the market are few and they produce most of the products. Significant cost saving is provided due to the large size of the company, which has a significant advantage over smaller firms. Competition in such industries is not possible due to the large equipment costs and limited market capacity.

Market has its own infrastructure. Under the market infrastructure is a set of government and commercial enterprises and institutions which ensure the functioning of market relations.

There is a labour market infrastructure, commodity and financial market.

Depending on the social division of labor market is local, national and international. Types of competition perfect and imperfect. There are many other classifications.

The Basic elements of the market infrastructure and trading network, the customs and tax system, banks and stock exchanges.

The functioning of the market could not be managed without advertising, Advisory and informer services, institutions audit and supervision.

 Market infrastructure leads to facilitating barter transactions, legal and economic control over them, increasing their efficiency and effectiveness, providing information support. Depending on the type and kind of market and there is a specific infrastructure configuration.