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6 Types of Market

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A market is a venue of exchange. This includes markets for products, services, capital, land, assets, investments and labor. The following are common types of market.

Perfect Competition

A mostly theoretical type of market where supply and demand are in perfect equilibrium. This is efficient as it maximizes the value, also known as utility, delivered to consumers. Real markets can be close to perfect but are never completely perfect because this requires things such as perfect information that generally don't exist.

Competitive Market

A market that is close to perfect with slight imperfections such as sellers that have an information advantage over buyers. In a free market system, markets are considered competitive where there are a large numbers of buyers and sellers with nobody dominating the market. In the United States a large number of markets are competitive such as:
Bakeries
Clothing
Food
Hotels
Housing
Labor
Land
Restaurants
Stocks
Vehicles

Oligopoly

A market dominated by a small number of sellers. This can be somewhat efficient if there is lively competition between these sellers. The following are examples of industries that are arguably oligopolies in many developed nations.
Accounting Firms
Agricultural Biotechnology
Agrochemicals
Airlines
Banking
Credit Rating
Fast Moving Consumer Goods
Information Technology
Media
Mobile Devices

Duopoly

A market dominated by two firms. This gives these firms a great deal of market power such that markets can be viewed as inefficient. The following industries are commonly duopolies, depending on the nation and product category.
Agricultural Biotechnology
Agrochemicals
Aircraft
Airlines
Energy
Information Technology
Mobile Devices
Telecom
Utilities

Monopoly

A market dominated by a single firm such that buyers have no choice. This leads to inefficiencies such as high prices, low quality, poor service and unfair terms. Monopolies often exist at the national or regional level such as a nation or region with a single airline or state controlled media. Monopolies can also be created by intellectual property rights and other barriers to entry.
Airlines
Biotechnology
Capital Equipment
Information Technology
Media
Public Transportation
Telecom
Trains

Monopsony

A market with a single buyer such that sellers are extremely dependent on the buyer and have no negotiating power.
Capital Equipment
Goods in a Communist System (e.g. agriculture that must be sold to the government)
Labor in a Communist Country (i.e. a nation where the state is the only employer)
Medicine in a Country With Universal Public Healthcare
Overview: Market Types
Type
Definition
A venue of exchange.
Related Concepts

Markets

This is the complete list of articles we have written about markets.
Competitive Market
Consumer Market
Free Market
Laissez Faire
Market Change
Market Failure
Market Forces
Market Power
Types of Market
More ...
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Grey Market

The definition of grey market with examples.

Captive Market

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Oligopoly

A list of industries that can be considered oligopolies.

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