Index
Introduction - 1
Defining A Market - 2
The Importance Of Competition - 3
The Result Of Competition - 4
Intervening In Markets - 5
The Allocative Role - 6
The Distributive Role - 7
The Regulative Role - 8
The Regulative Role (continued) - 9
The Role Of Government - 10
The Role of Government (continued) - 11
The Stabilizing Role - 12
Vertical and Horizontal Integration Defined - 13
Defining Market Structure - 14
How A Firm Can Grow - 15
Mergers and Takeovers - 16
Vertical And Horizonal Integration (Diagram) - 17
Why markets Vary in Structure - 18
Product Differentiation - 19
Product Differentiation (continued) - 20
Free Range ''Googs''- 21
Product Differentiation (continued) - 22
Non Price Competition - 23
Non Price Competition (continued) - 24
Defining The Types Of Market Structures - 25
Perfect Competition - 26
Perfect Competition (continued) - 27
The Market For Oranges - 28
The Market For Oranges (continued) - 29
Bitter Oranges - 30
Summary: Perfect Competition - 31
Monopolistic Competition - 32
True Blue Oranges - 33
Monopolistic Competition (continued) - 34
Oligopoly - 35
Oligopoly (continued) - 36
Oligopoly (continued) - 37
Kinked Demand Curves - 38
OPEC - 39
OPEC (continued) - 40
Monopoly - 41
Microsoft - 42
Why Monopolies Are Inefficient - 43
Revision Questions On Market Forms - 44

Monopolistic Competition - 32
The second type of market structure economists describe is similar to perfect competition. In such a monopolistically competitive market there are barriers to entry, but these barriers are relatively small. The number of firms operating in such a market is large; each firm has a small market share and firms have only a limited ability to influence prices.

In a monopolistically competitive market, the product of one supplier can be differentiated from that of another producer. An efficient producer will use non price competitive methods to convince consumers to pay a higher price for his or her production. The most common form of non price competition is advertising. Your competitor's product is a close substitute for yours; you must maintain relatively high levels of non price competition to keep your customers.

How can our friend the orange grower create a ''niche'' market for themselves? Somehow, a difference must be found, or ''created'', to sway consumers towards them. The orange grower should look at the success of potato growers. All potatoes are not the same. Some varieties are better for making chips; others are better for making mashed potatoes. . Indeed, the variety best suited for making creamy mashed potatoes is not a good one for making chips. (These potatoes absorb too much oil, and do not fry well, and the chips are not ''crisp''). Potato growers have worked with fruit and vegeatble retailers, and it is common now to find potatoes advertised as ''Kennebec'' and ''Pontiac'' (two of the most popular varieties), with information on which varieties are best suited for what types of cooking provided near the potato sales point. Retailers are happy; they can charge a higher price for goods that are now ''differentiated''; growers are happy too, because they receive higher incomes.
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http://www.nre.vic.gov.au/agvic/ihd/projects/vegetables.htm