Table of ContentsIntroductionMarket StructuresMonopolyOligopolyMonopolistic CompetitionConclusionBibliographyIntroductionThis essay will briefly explain the different market structures and evaluate their advantages and disadvantages. It will connect the theory and case study of market structures and there will be two main market structures, oligopoly and monopoly, which will be explained by connecting the case study on Apple and Spotify. This report will explain how the disadvantages of monopoly give way to oligopolies and how the disadvantages of oligopolies give way to monopolistic competition. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Market StructuresDefined as the degree of competition that exists in the market between different producers (Palmer and Hartley, 2012). “A market involves the exchange of goods and services between producers and consumers and includes goods and services considered substitutes” (Harrison, 2014). Durkheim (2013) states that the number of companies competing in a market is arguably most important in determining the profitability of each company. Barriers to entry and exit from a market may depend on the profit or loss in that specific market. To explain further, looking at the case study, Spotify was the first and leading consumer provider in the music market. Due to the success and profits acquired by Spotify, Apple decided to launch Apple Music to compete with them. Before Apple ventured into the music market, they had a monopoly in the smartphone market. The same goes for Spotify, which was an oligopoly in the music market. Once Apple joined, they both became the top two consumer providers in the music market. MonopolyMonopolies exist when there is only one supplier or producer for a certain market (The Economic Times, 2019). There are no substitutes for these goods, so they generate abnormal profits in the long run (Palmer and Hartley, 2012). Due to high barriers to entry, such as high costs, this discourages the creation of new businesses. It can be argued that Apple was a monopoly in 2014. Apple controlled a significant portion of the smartphone market. The first advantage of monopolies lies in technological advantages. The majority of consumers in the smartphone market used Apple smartphones because they had technological advancements. The second advantage is that monopolies have economies of scale and high production levels, therefore any new market entry will be driven out due to the large market share these monopolies control. By acquiring a significant market share, monopolies completely control the distribution process in the market. This turns into brand loyalty. Applying this to the case study, we can see that Spotify and Apple Music have reached a breakeven point. This is where neither company was going to lower their prices because they might not make enough profit to stay ahead of their competitors. Now both offered their consumers the same service at the same price. However, the reason they are both successful and not a big difference in that success is due to brand loyalty (BBC News, 2015). Spotify users were not going to abandon the subscription they had for a long time and Apple users, as well as previous iTunes users, were going to stay loyal and use Apple Music. However, thiscan create inconveniences. Being a monopoly means setting the price of a certain product and having no competition. This could mean that consumers are actually paying much more than the product is actually worth. Another disadvantage of monopolies is high market control. This means that businesses will not improve because they are comfortable with the brand loyalty they have with their customers. They can spend less on research and development, without improving their efficiency and setting high prices (Palmer and Hartley, 2012). These disadvantages give way to oligopolies.OligopolyAn oligopoly occurs when the market is dominated by a relatively small number of sellers (tutor2u, 2019). They are generally found in sectors where there are economies of scale and more competition. There is no formal agreement to keep prices the same, but a dominant company sets the price for consumers and usually other companies follow. In this case, Spotify was the dominant company in the market and we can see that Apple followed the set price. BBC News (2015) stated that Apple Music "will offer users a three-month free trial, after which the price will be the same as market leader Spotify." This is called dominant price leadership. One of the advantages of oligopoly is that if a company does well abroad, domestically, that profit can be used to compensate in the international market. The disadvantage of an oligopoly is that it is not in the consumer's interest. If there are economies of scale, they should be reflected in the price set. This disadvantage gives rise to monopolistic competition. In this case study, Spotify competes in their respective streaming markets with Apple in an oligopolistic market. Spotify could benefit from Apple's price fragility by achieving price stability. These benefits allow consumers to begin planning necessary expenses to reduce their debt (Chief, 2019). Spotify thus maintained its ever-increasing consumer revenue margin, offering more artist styles than Apple Music. As few players in the markets compete for consumers, companies are encouraged to provide the best information possible in order to attract considerable attention to their products and services. In this situation, it can be argued that Apple wants to sell itself as a better brand than its competitors, such as Spotify. Perhaps this is the reason why Spotify attracts more users and more people to Apple music because Apple needs to focus on its other products like its mobile devices, watches and much more. This could be the biggest factor at Apple. Not surprisingly, as Spotify says in the case study, it has raised $526 million (£334 million) in new funding and is now estimated to be worth $8.5 billion. dollars. Monopolistic CompetitionMonopolistic competition is a market structure that combines elements of monopoly with elements of competition. markets (Pettinger, 2019). A monopolistic competitive market is one where entry and exit are free, but firms can differentiate their products. This link is to the case study. Since streaming music is now available on multiple platforms, some users will like to hear their music on sites like YouTube, the world's largest video sharing network. All this is due to the disadvantages of monopolies and oligopolies, which have transformed the market into monopolistic competition. Studies show that the UK streaming market. 2019]