The types of market structures depend on the environment of their functioning. For example, which industry one or another business entity belongs to. In their analyzes, the researchers determined the criteria that are involved in determining the variety, namely:
- the number of companies that represent certain products manufactured by a particular industry;
- characteristics of the finished product (differentiated or standard);
- the presence of barriers or their absence on the way of companies entering a certain industry (exit from it);
- availability of economic information.
The types of market structures of imperfect competition cannot be unambiguously determined. That is why the manufacturer has certain opportunities in influencing the market. The types of market structures depend on subspecies of imperfect competition. So, when operating in a monopoly, the imperfection in the competition is small and is associated only with the ability of the manufacturer to produce products that are different from other varieties. In an oligopoly, the main types of market structures are fairly broadly classified and depend on the activities of existing companies. The presence of a monopoly implies the dominance of only one manufacturer in the market.
The types of market structures are closely dependent on the products offered, especially when it comes to a limited number of companies. So, large corporations, having concentrated in their hands most of the offers on the market, may find themselves in special relationships with other business entities and the market environment. Firstly, if they have a dominant position in the market, they can have a significant impact on product sales. Secondly, some changes in the relationship between the market participants themselves may undergo. So, the attention of manufacturers is focused on the behavior of their competitors, so that their reaction when changing their behavior is timely.
The types of market structures in the conditions of perfect competition are some abstract models that are convenient enough for analyzing the basic principles of organizing the market behavior of companies. The reality argues differently, competitive markets are quite rare, since each company has its own face, and each consumer, when choosing the products of a certain company, selects products that are characterized not only by their usefulness, but also by price, and also the attitude of the buyer to this company and the quality of its products.
That is why the types of market structures are more numerous in markets with imperfect competition, which got their name due to the presence of imperfect elemental mechanisms of self-regulation. In this environment of functioning companies, one can observe the principle of the absence of deficits and surpluses, which may indicate the achievement of efficiency in the perfection of the market system.
