In a pure competitive market, there are large numbers of firms producing a standardized product. Market prices are determined by consumer demand; no supplier has any influence over the market price, and thus, the suppliers are often referred to as price takers. The primary reason why there are many firms is because there is a low barrier of entry into the business. The best examples of a purely competitive market are agricultural products, such as corn, wheat, and soybeans.
Monopolistic competition is much like pure competition in that there are many suppliers and the barriers to entry are rather low. However, the suppliers try to achieve some price advantages by differentiating their products from other similar products. Most consumer goods, such as health and beauty aids, fall into this category. Suppliers try to differentiate their product as being better so that they can justify higher prices or to have a larger market share than the competition. Monopolistic competition is only possible, however, when the differentiation is significant or if the suppliers are able to convince consumers that they are significant by using advertising or other methods that would convince consumers of a product's superiority. For instance, suppliers of toothpaste may try to convince the public that their product makes teeth whiter or helps to prevent cavities or periodontal disease.
An oligopoly is a market dominated by a few