What is a competitive market? Briefly describe the type of markets other than perfectly competitive markets.
A competitive market is a market in which there are many buyers and sellers, none of whom have significant market power to influence prices. In a competitive market, prices are determined by supply and demand and firms compete with one another to attract customers.
Other types of markets include:
- Monopoly: A market in which there is only one seller who has complete control over the supply of a product or service.
- Oligopoly: A market in which there are a small number of large firms that dominate the market and have the power to influence prices.
- Monopolistic competition: A market in which there are many sellers offering slightly different products or services, allowing each firm to have some degree of market power.
- Duopoly: A market with only two sellers that dominate the market and can set prices independently.