First of all, a large number of enterprises in the production group produce different products of the same kind, and these products are very close substitutes to each other. Such as beef noodles and shredded chicken noodles. The product differences here not only refer to the differences in quality, structure, appearance, sales and service of the same product, but also include the differences in trademarks and advertisements and the fictional differences based on consumers' imagination. For example, although there is no substantial difference in the same dish sold by two restaurants (take steamed fish as an example), consumers psychologically confirm that steamed fish in one restaurant is more delicious than that in the other, and there is a fictional difference at this time.
On the one hand, because there are differences between each product in the market, each product has its own characteristics and is unique, so each manufacturer has a certain monopoly power on the price of its own products, which makes the market have monopoly factors. On the other hand, because different products are very similar substitutes, each product will encounter a lot of competition from other similar products, and there are competitive factors in the market.
Second, there are so many enterprises in a production group, and each manufacturer thinks that his behavior has little influence and will not attract the attention and reaction of competitors, so he will not be affected by the retaliatory measures of competitors. Such as lunch boxes, hairdressing industry.
Third, the production scale of manufacturers is relatively small, and it is easier to enter and exit a production group.
In real life, monopolistic market organizations are very common in retail and service industries, such as repair and candy retail.
In a monopolistic competitive production group, the products of different manufacturers are different, and the cost curve and demand curve between manufacturers are not necessarily the same. However, in the market model of monopolistic competition, western scholars always assume that all manufacturers in the production group have the same cost and demand curve, and analyze them with representative manufacturers. This assumption can simplify the analysis without affecting the essence of the conclusion. [Edit this paragraph] Monopoly competition is different from free competition, which is a concept opposite to free competition, and refers to all kinds of behaviors that exclude and restrict free competition. It belongs to the scope of adjustment of competition law just like unfair competition, but there are essential differences between them: unfair competition does not restrict or exclude free competition, and it engages in business activities by unfair and illegal means on the premise of admitting and allowing other competitors to participate in free competition; The essence of monopoly is to fundamentally exclude and restrict free competition, and there is no compatibility with free competition.
The most critical factors in the market structure of different industries are:
1. There are three kinds of vendors: small operator competition, oligopoly and exclusive monopoly.
2. Product differences, due to the influence of advertisements and trademarks, the degree to which buyers like or dislike certain products can also affect the market structure.
3. The difficulty of new manufacturers entering the industry can be divided into three categories: blocked entry, blocked entry and easy entry.
The competition of small operators can be divided into pure competition and monopoly competition. In pure competition, a large number of small vendors supply similar products to the same market. None of them can control the market price, but they must accept the market price determined by the total supply of products provided by all vendors and the total demand of products by all buyers. All manufacturers tend to adjust their products to the quantity that can bring him the greatest profit according to the current market price without changing the market price. However, due to this adjustment of all suppliers, the total supply has changed, so the market price has risen or fallen. This process continues until the total amount that all sellers are willing to produce is equal to the total amount that all buyers are willing to buy, reaching a temporary equilibrium price. Monopoly competition will occur when small operators provide different kinds of products, that is, when there are differences in products.
Oligopoly is generally a combination of monopoly trend and competition trend. In the simplest form, there are not many manufacturers, and each manufacturer supplies enough market share, so that any change in its policy will affect the market share of all competitors and cause their reactions.