When it comes to owning your own business like the removing reviews from Google team has, it is important to know where you stand in the four types of competition, which include perfect competition, monopolistic competition, oligopoly, and monopoly.
Table of Contents
Perfect Competition
This involves many small companies, none of which can control prices; they simply accept the market price determined by the supply and demand.
Monopolistic Competition
This involves many sellers but they don’t sell identical products. They sell differentiated products, products that somewhat differ or are seen to differ even though they serve a similar purpose. The product can be differentiated by the quality, style, convenience, location, and brand name. an example with this would be with Coke and Pepsi. The product seems almost similar but some people prefer one over the other. Here if there was a big promotional sale on one of these brands, people who preferred the other might switch over forever or at least temporarily.
Oligopoly
Oligopoly means having few sellers and this is where the removing reviews from Google team fall under since there are only so many reputation management companies out there. Oligopoly is when each seller supplies a large portion of all the products sold in the marketplace. The cost of starting a business in an oligopolistic industry is often high; the number of firms entering this is low. Companies in this field include airlines and automobile companies. There is a catch to this because when one company lowers the price, another company will lower there’s in order to stay in the competition. Competitors in the oligopolistic industry will always have similar promotions than their competitors.
Monopoly
A monopoly only involves one seller in the market. The market could be based on a geographical area, such as a city or regional area and doesn’t necessarily have to be an entire country. There are few monopolies in the U.S. and most of them fall into two categories: natural and legal. A natural monopoly includes any public utilities, such as electricity and gas supplier. Although they do inhibit competition, they’re legal because they are important to society and that is why it would be inefficient to duplicate the products they provide. A legal monopoly arises when a company receives a patent to giving it exclusive use of an invented product or process. A patent is usually only valid for twenty years.
