Understanding Monopolistic Markets And Their Characteristics

Understanding Monopolitic Market (Imaging Creativeart-Freepik)

YOGYAKARTA - The monopolistic competition market is one of the imperfect types of competition markets. This monopolistic market system was developed because there was no satisfaction with the analysis of the perfect market competition model or the monopoly market. Want to know what the more detailed understanding of the monopolistic market is? Follow the description below.

However, if we observe from the structure of the monopolistic market, the system is closer to the perfect competition market. But producers will participate more in this type of market to create a different product and have their own characteristics.

The monopolistic market is a market where many manufacturers produce similar but different goods in several aspects. Sellers in the monopolistic market are not limited, but each resulting product certainly has a certain character that distinguishes it from other products. Quoting from several sources, the monopolistic market is one type of imperfect competition market. This monopolistic market system was developed because there was no satisfaction with the analysis of the perfect market competition model or the monopoly market.

Meanwhile, in Jun Surjanti's book Economic Theory (Micro Approach) and friends, the monopolistic market is a market with many manufacturers producing different characteristics. In this type of market, producers offer one type of goods with various product characteristics in terms of quality, shape, and size.

With the difference in each product offered, it will reflect the real difference between the products to be purchased. But also perhaps, the differences formed are only the assumptions of each consumer.

Products offered by various manufacturers in the market are indeed different. For example, we can observe the difference between a product and its physical form of packaging. Starting from differences in shape, size, function, and product quality.

Not only that, we can also observe the differences in each product from the brand, logo, and packaging. After that, to make a clearer view of product differences, we can observe from the timeframe of the product sales credit, the convenience of accessing it, the availability of commodities, the position to obtain community, after sales services, and so on. There are also examples of products sold in the monopolistic market that we can find in everyday life, namely cosmetic equipment, clothes, medicines, places to eat, and many more.

1. Have a very large Number of producers or sellers

Manufacturers in the monopolistic market are very diverse and there are many. So that each seller or producer must feel satisfied with the relatively small distribution of the market and market share. Not only that, sellers in the monopolistic market do not have full power to ensure prices in the market.

2. Product Differentiation

The product differentiation that is defined here is a similar product that has different characteristics. We can see these differences from the shapes, sizes, patterns, quality, and others. Each producer will give characteristic characteristics and special touch to the products produced.

As with manufacturers of showcases as well as sports equipment such as Nike, Adidas, Fila, Skechers, as well as Puma have uniform products. Where all these companies issue the same type of shoes. But the products they produce have their own characteristics and characteristics.

3. Competition For Manufacturers Is Not Based On Prices

In the monopolistic competition market, producers or sellers tend not to be able to play with prices on the market. Unless there is a consensus that is tried simultaneously with other producers. Therefore, the competition that occurs in this market system is more aimed at design, quality, marketing, and excesses of each product.

4. Freedom Of New Producers To Make Out And Enter The Market

All manufacturers in this market system have the freedom to enter and leave the market. Because, the products they offer can be replaced by uniform products from other producers who still survive in the market. This will certainly not cause scarcity of products and make it difficult for consumers who want to look for these products.

5. Technology Growth and Innovation

Because there is stiff competition and a large number of competitors in it. So each producer or seller is required to be able to continue to provide innovations to the products they offer. This also creates technology that can grow quickly to keep up with the innovations desired by producers.

In addition, you are also advised to read the opponent: 'What Is Monopoly Market' in order to find out the difference in more detail.

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