A set up where two or more parties engage in exchange of goods, services and information is called a market. Market is of four types:
- Perfect Competition
- Monopolistic competition
Perfect competition is a market system characterized by many different buyers and sellers. In the classic theoretical definition of perfect competition, there are an infinite number of buyers and sellers.
An Indian fish market might be an example of something close to this
A monopoly is the exact opposite form of market system as perfect competition. In a pure monopoly, there is only one producer of a particular good or service, and generally no reasonable substitute.
The cable company is an example of this in India. The cable company in India, facing no competition, is notorious for poor quality and poor service.
An oligopoly is similar in many ways to a monopoly. The primary difference is that rather than having only one producer of a good or service, there are a handful of producers, or at least a handful of producers that make up a dominant majority of the production in the market system.
In India, an example of this would be mobile telephony – There are only a few operators, examples of which are: Airtel, Idea, BSNL, Reliance
Monopolistic competition is a type of market system combining elements of a monopoly and perfect competition. Like a perfectly competitive market system, there are numerous competitors in the market. The difference is that each competitor is sufficiently differentiated from the others that some can charge greater prices than a perfectly competitive firm.
After financial sector reforms in 1992, the banking system in India has become much more competitive with lots more banks offering similar products at similar prices. in America.) The cable company in India, facing no competition, is notorious for poor quality and poor service.