There are basically four types of market structure under whi

There are basically four types of market structure under which a business could operate. What are these market structures? Assume that you are the only producer of a product and have a patent that prevents market entry, what market structure do you belong? What is the optimum pricing strategy you should use under this scenario?

Solution

The four types of Market structures are

perfect competition:In a perfect competition market structure several firms are present who all produce identical products and are all sold at market price

monopolistic competiton:In this scenario firms do not produce identical products. There exist in the products difference in features, price, branding and so on.

oligopoly:In an oligopoly market there are a few players who need to keep an eye on each other’s strategy

Monoploy:A monoploy firm that has no competition,it reduces output to drive prices and increases profits

In the Given Scenario the market structure adopted is Monoploy becasue the company is the only producer ahd have patent which can be used to generate good sales and make profits.

As we have monoploy market segment of market structure the organization is having good pricing power and it is too significant for the company to charge the proce