The market structure of the economy is the pattern of the market in which they operate, the mechanism of the market depends upon the organization, whether they dominate the economy or not. Thus the importance of the market reflects from the member organizations of the market. The products produced by them, the rules of entry or exit in the industry, no. of customers and the capability to influence the prices of the market. All these features of the firms determine the type of the market.
A market refers to the place, where all the sellers and buyers meet to exchange the products and services. The sellers come there to earn money and generate profits and the buyer comes in the market to get the goods and services to get the utility from them. The market is not restricted to the particular place actually, the market can be anything where the actual exchange of goods and services occurred.
Thus a market structure is a dynamic concept, which considers all the factors of dealings of the sellers as well as buyers. In Australia, there are generally four types of prevailing market structures, which are as follows:
Monopoly is the type of the market structure in which there is only one seller and a huge no. of buyers. Thus, the seller is the leader of the market who has full control over the market and the prices of the product, he controls the supply of the product to influence the price of the product. The main characteristics of monopoly market are as follows:
•Large no. of buyers
•No substitute for product
•Single firm in the industry
•Restriction in the entry of a new firm
•The seller is the price maker
As the seller is the controller of the market, no competitor can enter the market. Thus, in the present scenario, the government is the sole body who can be a single seller in the market and control it. For example, the electricity supply board, water supply boards are the government bodies and the single sellers in their fields. Thus they are rulers of the market. However, they charge the premium prices for their services. The airport of Sydney in Australia is also the market leader. The international airport is providing high-quality services to the natives as well as to the tourists. The airport is having a monopoly in the country as they have the right to refuse any second international airport in Sydney. The airport is also playing a great role in the Australian economy by supporting the economy by earning great profits for delivering better services.
The monopolistic competition market is the combination of the features of perfect competition and monopoly market. There are no. of buyers as well as sellers more than the monopoly market but less the perfect competition. It is just like the perfect form of the market structure, where there is no restriction in the entry or exit from the market. The features of the monopolistic market are as follows:
•The large no. of sellers
•The products offered are differentiated
•No restriction in entry or exit from the market
•Seller is the price taker
•o perfect knowledge prevailing in the market
•Substitutes of products are available
Because of all these features, the monopolistic competition market is very volatile in nature. And it is easy to influence the market and the decision of the buyer through advertisement. The buyers are loyal towards brand thus the sellers who have built brand image can earn better in the market. The major example of the monopolistic market in Australia is of Starbucks.
The duopoly is that type of market structure where there are only two sellers as the name of the market suggests. The features of the market are as follows:
•Large no. of buyers
•Restriction on entry or exit from the market
The major example of duopoly market structure in Australia is the grocery sector in which 79% of the market was taken by two companies named as Woolworths and Wesfarmers. But in recent times, it has seen that these two grocery kings are facing competition from the new entrants- Aldi, Costco, SPAR. These are German-based companies. Thus the Australian market comes at the end of the duopoly structure now the oligopoly market is prevailing in the grocery sector.
In the oligopoly market, there are few sellers, which can be differentiated on two perspectives. The one who sell identical products and the other who deals in differentiated products. On this basis, we can differentiate the oligopoly market in two forms.
Pure oligopoly in which the seller deals with identical products.
Differentiate oligopoly in which the seller deals in the differentiated products.
The features of the oligopoly market are as follows:
•Less no. of sellers
•Sellers depend upon each other
•the war in price determination
•difficulty in the entry or exit from the market
•this market form is quite complex than others.
The major participant in the oligopoly market in Australia are Coca-Cola, Kellogg’s, Dunlop, Bridgestone etc. the biggest oligopoly market is of telecommunication sector where Telstra was sole seller in the market but now the monopoly of Telstra has been provided with the competition from Vodafone Australia and Optus company from Singapore.
Conclusion: there are different types of markets prevailing in different sectors of Australia. Thus all sectors have different advantages due to the different features of the form of market, which are contributing towards the development of the Australian economy.