What are some examples of monopsony market
Market forms (English market forms) describe the structure of supply and demand. After this Market form scheme there are 9 different types of market. The three main types of market are monopoly, Oligopoly and Polypol.
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Overview of market types
The Pricing of products is determined not only by costs but also by the market or by competition. According to the number of providers, there will be three different ones Market forms Are defined:
If you want to know more precisely what these types of market treat, take a look at the individual articles. If you want to better understand the difference between each of them, you've come to the right place.
- Of a monopoly If the entire market for an economic good is only available from a single provider, one speaks of the Monopoly is served. This can then Monopoly price determine for the good.
- If, on the other hand, a few market participants dominate the market on the supply or demand side, it is a question of a Oligopoly. A distinction is made here again in Supply oligopoly and Demand oligopoly.
- The third of the typical market forms is that Polypol. Here, there are many suppliers on the one hand and many customers on the other.
Market form scheme
After this Market form scheme Heinrich von Stackelberg divides the market types according to the number of suppliers and buyers. So can a, few or lotsproviders face one, few or many inquirers. So there are a total of nine different market forms in the scheme:
Monopoly oligopoly polypol
In one monopoly prevails No competition, since the monopolist acts as the sole provider of a good or a service. in the Polypol on the other hand, due to the high number of suppliers and buyers, there is a very high strong competition. That stands in between Oligopoly: The competition is weaker here than with Polypol and the state controls in the form of the Federal Cartel Office in the case of a merger of companies, whether a monopoly can arise as a result of this company merger.
Oligopoly monopoly polypol pricing
In Polypol, the price arises from supply and demand. The individual market participants, suppliers as well as buyers have no increased Positions of power and therefore not the possibility of influencing the price in your favor.
It looks a little different in the oligopoly: If there is a price change, the oligopoly must also react to it competitor consider. Most of the time, they follow suit when prices change. Illegal price fixingsuch as are regularly accused of filling stations are prohibited by law.
In a monopoly, the price is not regulated by supply and demand. The monopoly in his Position of power can do the Determine the price alone. This also leads to rather high prices in the monopoly. The monopolist only has to take into account the willingness of customers to buy. At very high prices, the demand drops drastically and the provider can sell fewer products.
Polypol oligopoly monopoly summary
- many suppliers, many customers
- strong competition
- no increased position of power for individual market participants
- Supply and demand regulate the price
- few providers or few buyers
- The reaction of the competition must be taken into account when price changes occur
- Risk of illegal price fixing (cartel formation)
- Mergers of companies are tightly controlled
- a supplier or a demander
- No competition
- Monopolist rules the market and sets the price
Market types examples
The market forms monopoly, oligopoly and polypol are roughly divided. As already considered, they are defined by the number of suppliers and buyers. Viewed in more detail, however, this results overall according to the market form scheme nine types of market.
Bilateral monopoly / bilateral monopoly:
- Exactly a provider stands a demander across from.
- Example:A Manufacturer (Providers) of Bicycle Accessories specializes in a spare part that is only available from one Bicycle manufacturer (Enquirer) is asked.
Limited monopoly / limited demand monopoly:
- Few providers stand few inquirers across from.
- Example: There is few Manufacturer (Providers) for police cars and only that Country as Enquirer.
Monopsony / monopoly of demand:
- Thank sellers stands a demander across from. A monopoly of demand or monopsony often goes off Country out. For example, only the state asks for armaments, highways or the like.
- Example: The Country (Demander) puts out the construction of a kindergarten to the public. Apply there many construction companies (Providers).
Limited monopoly / limited supply monopoly:
- A provider stand few inquirers across from.
- Example: A patented special medical device is sold by a company (supplier) and by few clinics bought (demander).
Bilateral oligopoly / bilateral oligopoly:
- Few providers stand few inquirers across from.
- Example: Few providers of large cruise lines hit few shipping companies (Buyers) who take delivery of the ships.
Oligopsony / Demand oligopoly:
- Many providers stand few inquirers across from.
- Example:Lots of farmers (Vendors) produce grain and sell it few mills (Consumers) who process the grain.
Monopoly / supply monopoly:
- One provider stands many inquirers across from.
- Example: Until 2007, Deutsche Post had an exclusive license to transport letters. It was the so-called Letter monopoly.
Oligopoly / Offer oligopoly:
- Few providers stand many inquirers across from.
- Example:Few companies produce motor vehicles for many automobile owners (Enquirer). The Deutsche Bahn and their competitors are few providers that many passengers (Customer) transport.
- Many providers stand many inquirers across from.
- Example: Bid on the housing market many landlords (Providers) potential tenants (Inquirer) to their apartment. Lots Supermarket chains (Provider) offer Consumers (Inquirers) their goods for sale.
To deepen your knowledge of market types, you can try our exercise.
Questions of understanding
Would you like to test whether you have understood the topic of market forms? Then take a look at our video.
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