Lesson 4/55 min
Market types and country economies
In economics a ‘market’ does not mean a place. It means a particular good that is bought and sold through direct bargaining between buyers and sellers.
Types of market
| Market | Buyers, sellers and features |
|---|---|
| Perfect competition | Many buyers and sellers; free of government influence. The best market for the buyer |
| Monopoly | Only one seller; no close substitute; new sellers cannot enter; the seller is a Price Maker |
| Monopolistic competition | Many sellers sell similar but differentiated goods; close substitutes exist; product differentiation is the main feature; proposed by E. H. Chamberlin |
| Oligopoly | More than two but few sellers; price leadership exists; also called competition among the few |
| Duopoly | Only two sellers, countless buyers |
| Monopsony | Countless sellers, only one buyer |
| Duopsony | Only two buyers, countless sellers |
| Share (stock) market | The market where shares are bought and sold |
Memory trick: -poly = number of sellers (mono 1, duo 2, oligo few). -psony = number of buyers (mono 1, duo 2).
Did you know?: A fixed place is not a feature of a market (a market means a particular good, not a place). When the price level keeps rising, people's purchasing power falls.
Communist states
- China, Cuba, Vietnam, Laos and North Korea
- South Korea, Brazil and Poland are not communist states
Country groupings
- Four Tigers, Asian Tigers or Dragon economies: Singapore, Taiwan, South Korea and Hong Kong
- East Asian Miracle (World Bank 1993 report): Japan, Thailand, Malaysia, Indonesia, Singapore, Taiwan, South Korea and Hong Kong
- By size, the world's two largest economies: the United States, then China
Watch out: The book lists ‘Three Tigers: Japan, Germany, Italy’, ‘Super Seven’ and calls Taiwan the ‘fifth dragon’. These could not be verified, and Taiwan is already one of the Four Tigers, so they are left out. The order of economies after the top two also changes from year to year.
Financial year
| Country | Financial year |
|---|---|
| Japan | 1 April – 31 March |
| United Kingdom (government) | 1 April – 31 March |
| India | 1 April – 31 March |
| United States | 1 October – 30 September |
More to know
- Foreign Direct Investment (FDI): investment made by a foreign firm
- BIDA (Bangladesh Investment Development Authority) began on 1 September 2016, formed by merging the Board of Investment and the Privatisation Commission
- On 5 July 2015 Greece held a referendum on the creditors' conditional bailout proposal, because of its debt crisis
Check yourself
When does the financial year begin in the United States?
At a glance
- 1
Oligopoly: more than two but few sellers; duopoly: two; monopsony: one buyer.
- 2
Monopolistic competition was proposed by E. H. Chamberlin; perfect competition is best for the buyer.
- 3
Communist states: China, Cuba, Vietnam, Laos, North Korea.
- 4
Four Tigers: Singapore, Taiwan, South Korea, Hong Kong.
- 5
US financial year: 1 October–30 September; Japan, UK and India: 1 April–31 March.
- 6
BIDA began on 1 September 2016.