Market Structure

The market is an organized structure, which includes sellers and buyers, producers of goods (services) and their consumers. 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 size, the degree of difference or similarity of goods, the ease of entering and leaving a particular market, the availability of information. The ability to influence the formation and level of prices depends on the structure of the market.

The structure of the market exists in 4 types:

- perfect competition. In this form there is a large number of small firms with homogeneous products. Entry and exit from the industry is not difficult, there is an equal access to any information. The price is set by the market and the role of the organization in its formation is small. The competitive structure of the market is the most developed, since it is supported by the state. There are several forms: functional competition, species and subject competition.

- monopolies. There is one firm that produces unique products. Access to information is partially limited, entry to the market of other organizations is almost impossible. With this structure, the organization itself sets prices that are higher than it could be under perfect competition. The state seeks to pursue antimonopoly policy, create competition in the sale of goods and services. Monopolies exist in the following forms: closed, open and natural. The first is protected by legal prohibitions on competition. The second special protection has not. At the third, the long-term average costs of the firm are minimal if it serves the entire market.

- monopolistic competition. This market structure exists in the form of many small firms. The products are not homogeneous. Entry and exit from the industry are not difficult, and access to information is partially limited.

- oligopoly. A small number of large firms with homogeneous or heterogeneous products carry out their activities. There may be difficulties in leaving the firm from the industry, access to information is partially limited. Usually, such a market structure has technically complex industries. For example, metallurgy, automotive, aircraft construction, chemistry, electronics.

The number of firms of such a structure that carry out activities on the market is not numerous and they produce most of the products. Significant cost savings are provided by the large size of the firm, which has a significant advantage over smaller firms. Competition in such industries is almost impossible because of the high costs of equipment and the limited capacity of the market.

The market has its own infrastructure. Under the infrastructure of the market is understood the totality of state and commercial enterprises and institutions that ensure the functioning of market relations.

There is an infrastructure of the labor market, commodity and financial markets.

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

The main elements of market infrastructure are the trade network, customs and tax systems, banks and exchanges.

The functioning of the market can not be carried out without advertising, advisory and information services, audit and control institutions.

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