Ileana Fideuan
Level 3 Diploma in Business and Administration
Unit 1 Principles of business

1.1Explain the characteristics of different business markets
There are two types of different business markets:
-Perfect competioncompetition: rational buyers, zero transaction cost, no externalities, perfect information, no barriesbarriers to entry or exit, and a large number of buyers and sellers.
-Imperfect competition:monopolies monopolies- the sistemsystem is the only supplier of a product; monopolistic competioncompetition- many businessbusinesses sell thethe same product that are differentiated from one another,differentation differentiation of product;oligopoly here they are oligopoly- dominated by a small numbersnumber of sellers;monopsony in this market thebyuer and monopsony- the buyer dictates the price terms to its suppliers.

1.2Explain the nature of interactions between business within a market
In a perfect competition: interactions with many consumers buying a standard product from many small business,evenbusinesses; the sellers and the consumers accept the price,; and the seller does not always set the price.

In aan imperfect competition, there is theexist monopolies where in which the consumers buyconsumer buys the product and the seller setsets the price;. In monopolistic competition, the consumer will buy the product from different sellers, but the product is not identical;. In oligopoly, the consumers buyconsumer buys from a small numbers of large sellers hereand there is the high interdependeceinterdependence between the sellers;. In monopsony, the consumer has the power to dictate the price for many.