Posted at 11.19.2018
What is the marketplace? Market is a place and retailers come in person with buyers for the reason that place. But communication and travelling revolution changes it from a location Today's technology helps it be an ''environmental. '' Vendor or customers can supply or demand any goods with phone, fax or internet. The marketplace lost its concrete design.
The market's status and quality are very very important to the execution to full competition guidelines. The concept and description of the market is important for that subject matter.
Some economists split to the marketplace into two parts. These are; perfectly competitive market and imperfectly competitive market. I am going to make clear to monopoly market type and oligopoly market type of imperfectly competitive market and I'll touch after some top features of perfectly competitive market for understand dissimilarities.
One of the types of imperfect competition is monopoly markets. It is a kind of market which is definately not perfect competition market. There is merely one producer/seller for a product so the sole business is the industry. Difficult to go into such a market and requires high cost. You can find economic, interpersonal and political boundaries of these market segments. For example, if a government wants to control, such as electricity, it could be build a monopoly over that industry.
Monopoly market provides to its owners some special protection under the law and privileges for an asset or a natural resource. For instance, in Saudi Arabia, the federal government has only control over the olive oil industry. There is absolutely no fear of seller from any competing organizations. Because of there isn't another company that produces same goods or supply of same goods. Therefore monopoly companies move in freedom about sales price.
CHARACTERISTIC OF MONOPOLY MARKET
The the very first thing in the formation of monopolistic market is the way to obtain goods that can't be easily substituted. f you can find substitution of goods in that market, monopolistic firm's effectiveness will be reduced and it's self-reliance will be limited about price persistence. For example a monopoly firm cannot determine high price for selling prices of lignite coal. Because of there are other types of coal and electrical energy in the market. That firm should consider to indirect competition. The second factor the monopolistic firm has to think purchasing power of buyers. Due to if the organization determines higher value, it may well not find any buyer.
I want to provide example about monopoly of Turkey. Licorice main receiver is merely monopoly administration in Turkey which is called '' buyer monopoly''. There is only one owner in turkey about soda pop and food acids and it is called '' vendor monopoly''.
Four resources of monopoly electric power;
If a business has natural resources, it will provide to possibility a monopoly for business. For instance a hotel can gain monopoly electric power with a good beach and a perfect surroundings. Some countries have natural monopolies which on the mines or agricultural products at the international level. Caffeine, pineapple, oil, chromium are natural monopoly products in a few countries.
Legal monopolies divided into two; private monopoly and a general population monopoly. Examples of legal monopoly in turkey; raki and some spirits, rail transfer, postoffice services, radio and TV services. These based on privileges given by law. Private enterprise can has legal monopolies. Patent privileges are a form of legal monopoly. Patent give to a right to work with for a person who invented a new property. Patent privileges are protected by law and there are also international agreements on this subject.
Several big companies make a offer for eliminate to competition between them. This Collective monopoly usually advances in Germany. Cartels comprise for remove to competition on price and sales conditions. Trusts develop at USA; Cartels task to legal lifestyle, There isn't legal occurrence for the people of trust. For instance; all aircraft flying to form a cartel beyond your socialist countries, Airplane Company will have the same wage but each airplane company would depend.
Firms can take advantage of a genuine situation. For example, if the company is the first company on arm of the business, it can be a power in that market for a long time.
There are only a few firms that make up an industry within an oligopoly market. It really is a market type which has a small volume of sellers and a lot of buyers. This select group of firms has control over the price just like a monopoly. Oligopoly market has generally three, five or eight massive companies and their capabilities are equal to each other. There are a few giant companies for the reason that market about important items. For example, copper, lightweight aluminum, ferrous metals-steel, cars, tractors, trucks, car tires, petro-chemical and heavy market sectors have only three or five giant organizations in their own markets.
There are two retailers and lots of buyers searching for a good, the name of market are duopoly market.
In oligopoly market segments, number of suppliers is not less than monopoly markets for example the cost routing of power weaker than monopoly markets. But this quantity is not too much; each one can affect the purchase price level.
The company's drawback from the marketplace is important event in oligopoly market. It induced to go up prices. It affects to the full total source. The other hand is if a fresh firm enters the marketplace, prices will land and other businesses will be disturbed from that issue.
There are a tiny number of companies in oligopoly market so a firm affects to other businesses about some things. These topics are production amount, the grade of the goods, effort to increase about amount of sales, price coverage. Each company must follow other firm's position. It enjoys gambling player. Some economists make clear to oligopoly theory with game theory. The firms want to safeguard the certain price level and maintain price in oligopoly market segments. There's a secret agreement one of the firms about price.
Types of oligopoly market;
Homogenous oligopoly: If the products of all companies is comparable nature in that market, it'll be called ''homogenous oligopoly''. For example cement, material and aluminum market sectors. Degrees of dedication to the other person are very saturated in homogenous oligopoly. ±f a firm lower price, it effects to rival firm's sales
Differentiated oligopoly: If the goods of companies differs from each other for the reason that market, it'll be called ''differentiated oligopoly''. For example, automobiles, equipment and building materials. Price changes create less effect on competitors. In short, if the degree of differentiation increases, interdependence between firms will be reduced
Full oligopoly; oligopolistic organizations create a group and they make an effort to maximize their income. Dependence between organizations is very strong
Partial oligopoly: That type of oligopoly is contrary to full oligopoly and dependence between companies is fragile so companies don't create a group.
PERFECTLY COMPETITIVE MARKET
The customers and sellers cannot influence to price by itself for the reason that market. In other words firms cannot connect with independent price insurance plan under the perfect competition. Price is visible and companies have to simply accept it. That is shown with horizontal price lines.
The conditions of perfect competition market are as follow;
There are a lot of sellers in that market who produce the same goods and there are a lot of buyers in that market who want to choose the same goods.
If a company increases or decreases to its amount of sales, the price tag on goods won't change too much. Due to there are many vendors for the reason that market. Inside the other words, each company must allow as the market price.
The same situation pertains to the buyers. There are plenty of buyers in that market. The amount of the purchase decisions of clients don't effect to the price tag on the products too much. That situation is named '' the assumption atomistic''.
The customers and sellers easily enter to market and they can certainly escape the market. In case the companies want, they can move to another industry or other business.
Produced or sold goods are homogeneous in correctly competitive market. In the other words, there no difference between the same kind of goods about quality and features.
Both potential buyers and sellers have full knowledge of the market. This is called ''openness assumption''.
COMPARISON OF PERFECT COMPETITION MARKET AND MONOPOLY MARKET
In perfect competition market, organizations make sales with lower prices than monopoly market. Due to the monopoly market's equilibrium price is more impressive range for long-term.
In perfect competition market, firms make to more low-cost creation but monopoly market's creation cost is higher than perfect competition.
The amount of creation of perfect competition firms is more than monopolistic businesses so their creation is more and cheaper than monopoly market.
Idle capacity can be a big problem for monopolistic businesses. There may be extravagance of creation resources in terms of world.
Monopolistic companies' earnings are extreme. It caused to inequalities in income syndication. It isn't comport with '' cultural justice'' principle.
Perfect competition's demand curve is totally flexible, in other words it is horizontal price series. But monopoly market's demand remedy is same negatively sloped market demand curve.
If the marginal cost is equal to price, perfect competition market will be equilibrium on that time. But it is different for monopoly market. If marginal income is equal to the marginal cost, it will be equilibrium on that point.
Information and communication sectors are developing nowadays in Turkey and it has exceeded to the limits of the country. That sector was more influenced by the scientific developments. More than a decade ago public teams have the telecommunications companies. That's called '' monopoly''. However, today the corporation isn't only permanent cell phone service.
Mobile and mobile phone, internet, cable TV, electronic commerce results to it's structure. All countries change their areas and companies start new current economic climate.
Changes in the Telecommunications sectors;
Years 1980s; covered monopolies, secure demand, poor competition
Years 1990s; powerful structure, retail services, local competition
Years 2000s;competitive framework, international competition, this period are information get older and mobile communication, provide to added-value services ( for example internet)
Telecommunication sector creates the basic infrastructure of information population. This sector has monetary and commercial value which is a strategic sector. That sector was under express monopoly in old-time. But technical, economic and public improvements at the global level influenced that framework. New telecommunication order focuses on to give that service in competitive environment.
Before 1990s, there was a monopoly market framework in telecommunication industry. Turkish Telecom Company acquired that sector with legal monopoly. In July of 1993, Turkish telecom and Turk cell, Telsim companies agreed upon cellular phone system contract for share revenues. Both of the companies paid 500 million U. S. us dollars for license rate. Turkish telecom got 67. 1 percent of income in that sector, Turk cell and Telsim experienced 32. 9 percent of income in that sector get back contract. After Aria company joined the market. Turkish Telekom was privatized and Aycell Company of Turkish Telekom got into this competition. After a period of your energy, Aria and Aycell companies made a decision to unite plus they intended to ''Avea''. Telsim was sold to a new company and they have a new name that is ''Vodafone''.
Market and competition conditions of GSM providers in Turkey are oligopolistic market procedures. You can find 3 big companies in that sector. These are; Turk cell, Telsim and Vodafone. If one of these has a new price policy, it will be results to the other companies. In this case, other organizations can opt to cheap, they can make some advertising and sales companies or promotion plan. This sector in Turkey has all the top features of the oligopoly market.
Conditions of imperfect competition are an obstacle in front of the development. The market price is in the hands of the person in the monopoly market. A few people share to the market in oligopoly market.
There are extensive buyers and vendors in perfect competition environment. Price doesn't participate in a specific group. The competition provides to boost of countries. Turkey is working for provide to flawlessly competitive market conditions in its all sector.