There are four main market structures in an industry, namely, perfect competition, monopoly, oligopoly, and monopolistic competition. A perfect competition is a market structure that occurs when there are many small business organizations that engage in a competition with one another. On this basis, the decision of one seller does not create any impact on the price of the products under consideration (Parkin, 2012). It is important to denote that under this market structure, the products of the companies are standardized and they are identical.

These small business organizations do not have any influence on the price of their products. It is the market that determines the prices of their products, through the laws of supply and demand. This market is also characterized by an absence of barriers that prevent new companies from leaving or entering the market. An example of an industry that operates under a perfect market structure is the agriculture industry (Schwartz, Carew and Maksimenko, 2010). In the agriculture industry, there are a variety of firms that seek to sale agricultural produce to consumers. The prices of agricultural products are always guided by the laws of demand and supply, and no individual business person can influence the prices of agricultural products.

However, it is important to denote that a perfect competition is a theoretical type of market structure, and it rarely exists in the real life. This is because companies always advertise their services for purposes of gaining a market share, and reduce the prices of their products for purposes of increasing their sales. Companies will strive to control the prices of their products, in order to achieve profitability (Parkin, 2012). The perfect market structure is an opposite of a monopoly. Under monopoly, there is only a single company that provides a certain service or good. The company under consideration will always control the prices of its products because competition does not exist. In a monopoly, the product that is produced is unique, and hence there is no substitute for the products.

A monopolistic market is highly regulated, whereby new entries are blocked and it is also difficult to move out of this market. The reason as to why there is a restriction in this market is because of the high costs of operating the business under consideration. Political, economic and social factors can also be the reason as to why new players might be reluctant to invest in this market (Schwartz, Carew and Maksimenko, 2010). For example, the government can decide to form a monopoly in an industry that it wants to control. A good example is the electricity and the oil industry.

Another barrier might occur a comp