Types of imperfect competition

Monopolistic competition: A situation in which many firms with slightly different products compete. Production costs are above what may be achieved by perfectly competitive firms, but society benefits from the product differentiation. Monopoly: A firm with no competitors in its industry. A monopoly firm produces less output, has higher costs, and sells its output for a higher price than it would if constrained by competition. These negative outcomes usually generate government regulation. Oligopoly: An industry with only a few firms. If they collude, they form a cartel to reduce output and drive up profits the way a monopoly does. Duopoly: A special form of Oligopoly, with only two firms in an industry. Monopsony: A market with a single buyer and many sellers. Oligopsony: A market with a few buyers and many sellers.