Examples of Industries Essay
In a perfectly competitive industry, there are many buyers and many suppliers. It is assumed that the customers have all the information, and product sold by the suppliers is a perfect substitute. Hence, if a supplier increases his price, customers will shift towards others. Examples of such markets include the dairy farm industry, the fish market, and other raw agricultural products. (Mankiw, 2008)
In a monopolistic competition, there are numerous suppliers that are selling the same product but unlike perfect competition, the product is differentiated. There is free entry and exit of firms. Furthermore, all the firms have control over their profit. Hence, none of them is a price taker. Examples of such industries include fast food outlets, movies and films, and clothes. (Brue, Sean & Campbell, 2008) In an oligopoly, there are only a few firms in the industry that affect the price and profits of each other.
Such industries have high barriers to entry, and the prices are usually rigid, as there is a non-price competition. A cartel is an example of oligopoly in which companies agree to coordinate their production and pricing decisions. Examples of oligopolistic industries include the banking industry, the oil and gas industry, the automobile industry
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There is absolutely no competition, and the seller dictates the prices. The barriers of entry are high in a monopoly. Examples of monopolies include electric companies, and other utility companies such as gas and water. (Brue, Sean & Campbell, 2008) Works Cited Brue, Stanley, Sean Flynn, and Campbell Mcconnell. Economics. 18th ed. New York: McGraw-Hill/Irwin, 2008. Print. Mankiw, N. Gregory. Principles of Economics. 5 ed. Mason, OH: South-Western College Pub, 2008. Print.