Types of competition

Question 2

PERFECT COMPETITION

Answer 2

• Many competitors: all offering the same product
• Intense competition
• Competitors have to accept the same price

Question 3

MONOPOLISTIC COMPETITION

Answer 3

• Many small firms offering different products
• Each firm has a small market share

e.g restaurants/ local service businesses

Question 4

OLIGOPOLY

Answer 4

• Market dominated by a small number of firms, each with a large market share
• Tend to compete on non price factors, including branding
• Potentially anti competitive: particularly if competitors collude on price

e.g. retail banking, confectionery, grocery retailing

Question 5

MONOPOLY

Answer 5

• One supplier in the market
• Has control over price and output
• Tend to be heavily regulated to protect customers