This paper is discussing about the economic market structure, especially for imperfect competition market which are monopolistic competition market and oligopoly market. There will be explanations about definition, characteristics, and examples of monopolistic competition market and oligopoly market. There is Dunkin’ Donuts Inc. for the monopolistic competition market and Coca Cola Co. for the oligopoly market. This paper also will discuss about competitive strategies of Coca Cola.

Introduction

In economy study, people know that there are view types of market in the existence. These market types are differentiated according to number / distribution of firm(s) in the market. According to Sloman & Norris (2002), there are four types of market structures in the practice, which are perfect competition, monopoly and monopolistic competition, oligopoly markets.

Perfect competition market is a market with the most sellers and buyers in transaction. In this type of market, the products that provided are mostly homogenous. To get in into this market, there are no barriers. Both of the buyers and sellers is price taker (O’Sullivan et al, 2008), so in this market price is not the factor that could affect the sales, instead of it service is much more attractive.

Monopoly market is a market with a single firm that provide product that has no close-substitutes. This condition clearly shows that this type of firm has power that will allow them as the price maker, since there are no close-substitutes that can be chosen by consumer to replace the use of the service or goods provided by the firm. In this monopoly market there is entry barriers such as patent, government policy, etc.