The market is an organized structure, which includes sellers and buyers, producers of goods (services) and their consumers. Their interaction leads to the establishment of market prices.
The structure of the market is its most significant features, which include: the number of firms and their sizes, the degree of difference or similarity of goods, the ease of entry into and exit from a particular market, and the availability of information. The ability to influence the formation and price level depends on the structure of the market.
The market structure exists in 4 types:
- perfect competition. In this form, there are a large number of small firms with homogeneous products. Entering and leaving the industry is not difficult, there is equal access to any information. The price is set by the market and the role of the organization in its formation is small. The competitive market structure is the most developed, as it is supported by the state. It exists in several forms: functional competition, species and subject competition.
- monopolies. There is one company that produces unique products. Access to information is partially limited; entry into the market of other organizations is practically impossible. With such a structure, the organization itself sets prices that are higher than it could be with perfect competition. The state seeks to pursue antitrust policy, to create competition in the sale of goods and the implementation of services. Monopolies exist in the following forms: closed, open and natural. The first is protected by legal prohibitions on competition. The second has no special protection. In the third case, the long-term average costs of the company are minimal if it serves the entire market.
- monopolistic competition. This market structure exists in the form of many small firms. The products are heterogeneous. Entry and exit from the industry is not difficult, and access to information is partially limited.
- oligopolies. A small number of large firms with homogeneous or heterogeneous products carry out their activities. Difficulties may arise when a company leaves the industry; access to information is partially limited. Usually, such a market structure is in technically complex industries. For example, metallurgy, automotive, aircraft, chemistry, electronics.
The number of firms of this structure operating in the market is small and they produce most of the products. Significant cost savings are achieved due to the large size of the company, which has a significant advantage over smaller firms. Competition in such industries is practically impossible due to the high cost of equipment and limited market capacity.
The market has its own infrastructure. Market infrastructure refers to a combination of state and commercial enterprises and institutions that ensure the functioning of market relations.
There is an infrastructure of the labor market, commodity and financial markets.
Depending on the social division of labor, the market is local, national and international. By type of competition, perfect and imperfect. There are many other classifications.
The main elements of a market infrastructure are a trading network, customs and tax systems, banks and exchanges.
The functioning of the market cannot be carried out without advertising, advisory and information services, audit and control institutions.
Market infrastructure leads to the facilitation of the exchange of goods, legal and economic control over them, increasing their efficiency and effectiveness, providing information support. Depending on the type and type of market, there is a specific infrastructure configuration.