Market structure

In economics, market structure is the number of firms producing identical products which are homogeneous.

Types of market structures

  • Monopolistic competition, a type of imperfect competition such that many producers sell products or services that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms
  • Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share.
    • Duopoly, a special case of an oligopoly with two firms.
  • Duopoly, a special case of an oligopoly with two firms.
  • Monopsony, when there is only a single buyer in a market.
  • Oligopsony, a market where many sellers can be present but meet only a few buyers.
  • Monopoly, where there is only one provider of a product or service.
    • Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. A firm is a natural monopoly if it is able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms.
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