Introduction Perfect competition is a very rare type of market that is so competitive that it negates the impact that a single buyer or seller could have on the market price. The products or services sold are exactly the same and all have the same price. Businesses only make a normal profit, and in case businesses start earning more, other businesses will enter the market and lower the price level until only a normal profit can be made. The technology used is also the same in all companies. MonopolyMonopoly is a single player and a single monopoly is seen as an organization that holds 100% of a given market share. A monopoly produces less at a higher price and decides the price of its good/service by calculating the quantity of output such that its marginal revenue equals its marginal cost. The monopoly would then sell its good/service at whatever price allowed it to sell exactly that quantity. In practice monopolies are not absolute; they are usually bound by competition. One such case occurs when a single firm dominates a certain market, but has no pricing power because it is in a contestable market, “a market in which a firm is likely to be inefficient, or to earn excessive profits. , is pushed out by a more efficient or less profitable rival." (www.economist.com) OligopolyOligopoly occurs when a few select companies dominate a select market. In this situation there are only a few producers but many buyers, and the action of one producer will influence the influence of other producers. (www.oligopolywatch.com) when this happens the producers cannot decide the price like a monopoly does and often turn into competitors. When they compete on price, they can produce as much or less of a product or service. Just by looking at Easy Jet, you can see that competition has an effect and to maintain their customer base they have to reduce costs so that the demand for the service is still there. If they don't cut flight costs, they could lose demand to rival budget airlines. Increases in air passenger tax and landing fees also impact the company and therefore customers. Competitive advantage: to gain an advantage over rivals it is necessary to adopt a cost leadership strategy (produce at a lower cost), a differentiation strategy (these can be differences in color or size or alternatives for different market segments) and focus (focus on different market segments). Works Cited • http://www.economist.com/economics-a-to-z/c • www.oligopolywatch. com• www.quietlyconfident.co.uk/easyjet.doc• (www.strategicassetts.co.uk)