Various Market Structures And Their Pricing Policies.
                     Various Market 
Structures And 
Their Pricing 
Policies
Introduction
A pricing strategy can be described as the 
methods that the firms use to price their products 
and services. Companies and firms always set 
prices in accordance with the market structure 
they fall in.
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Perfectly 
Competitive Market
In a perfectly competitive market structure, the 
market sets the price and firms are merely price 
takers and thus they will operate for as long as 
production costs fall below revenue.
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Perfectly 
Competitive Market 
Pricing Policy
This is determined by the market demand and 
supply curves of the product under discussion. The 
demand curve clearly indicates the total amount 
of a product that consumers are both willing and 
able to buy. 
On the other hand, the supply curve indicates the 
amount suppliers are willing and able to supply at 
certain market prices.
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Monopolistic 
Competitive Market
In a monopolistic competitive market, companies 
set prices for their products. Since every company 
sells a product that might be the same as that of 
another company, each company can successfully 
set its prices.
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Monopolistic 
Competitive Market 
Pricing Policy
The prices will be dependent on the quantity they 
desire to produce. Since there are still many 
producers, this will not affect the market as a 
whole.
A company will use branding, advertising, and 
packaging to sell seemingly different products. 
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Oligopolistic 
Competition Market
Here, prices are determined by competitors. Firms 
in this market structure are highly dependent on 
each other for setting prices. 
With only a few sellers in an oligopoly, a company 
can affect the market prices but cannot control the 
whole market. As a result, competition is based on 
product differentiation and services, but not on 
price wars.
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Oligopolistic 
Competition Market 
Pricing Strategy
Generally, an optimal pricing strategy, in the long 
run, incorporates the reactions of rival firms to 
changes in prices by competitors.
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Monopoly Market 
Structure
A monopoly exists when a specific person or 
enterprise is the only supplier of a particular 
commodity.
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Monopoly Market 
Structure Pricing 
Strategy
The pricing strategy here is relatively simple. A 
monopoly can comfortably set prices due to the 
absence of competitors. 
However, monopolists are careful not to set their 
prices too high not to attract competitors or have 
consumers change their consumption habits in 
favor of substitutes. 
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