Competition
Competition is the battlebetween businesses towin consumer acceptance andloyalty
Competition can generally be classified into four main categories: perfect competition, monopolistic competition, oligopoly, and monopoly.
Perfect competition exists when a largenumber of sellers produce products or servicesthat seem to be identical. These types of businessesare typically run on a small scale, andparticipants have no control over the selling priceof their product because no one seller is largeenough to dictate the price of the product.
Monopolistic competitionexists when many sellersproduce a product or service that is perceived byconsumers as being different from that of a competitorbut is actually quite similar. This perceptionof difference is the result of product differentiation,which is the key to success in amonopolistic industry.
An oligopoly exists whenthere are fewsellers in a certain industry. Thisoccurs because a large investment is required to enter the industry, which makes it difficult toenter or leave. The businesses involved in anoligopoly type of industry are typically very largebecause they have the financial ability to makethe needed investment. The type of products soldin an oligopoly can be similar or different, andeach seller has some control over price.
Monopoly exists when asingle seller controls the supply of a good orservice and prevents other businesses from enteringthe field .
⠀ Satterwhite, M. (2001). Competition. In B. S. Kaliski(Ed.). Encyclopedia of Business and Finance, vol. 1.(pp. 152-155). MacmillanReference USA (p. 152)
⠀ Satterwhite, M. (2001). Competition. In B. S. Kaliski(Ed.). Encyclopedia of Business and Finance, vol. 1.(pp. 152-155). MacmillanReference USA (p. 153-154)