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    Lesson 3 The Market Structures

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    Athena Ly
    This document discusses different types of market structures: 1) Perfect competition is characterized by many small firms and identical products. Entry and exit is easy. 2) Monopoly is dominated by a single seller of a unique product, with high barriers to entry. 3) Monopolistic competition has many differentiated products and easy entry/exit, with competition on non-price factors. 4) Oligopoly has a few large firms that can impact prices of homogeneous or differentiated products, with difficult entry.

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    Lesson 3 The Market Structures

    Uploaded by

    Athena Ly
    49 views12 pages
    This document discusses different types of market structures: 1) Perfect competition is characterized by many small firms and identical products. Entry and exit is easy. 2) Monopoly is dominated by a single seller of a unique product, with high barriers to entry. 3) Monopolistic competition has many differentiated products and easy entry/exit, with competition on non-price factors. 4) Oligopoly has a few large firms that can impact prices of homogeneous or differentiated products, with difficult entry.

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    This document discusses different types of market structures: 1) Perfect competition is characterized by many small firms and identical products. Entry and exit is easy. 2) Monopoly is dominated by a single seller of a unique product, with high barriers to entry. 3) Monopolistic competition has many differentiated products and easy entry/exit, with competition on non-price factors. 4) Oligopoly has a few large firms that can impact prices of homogeneous or differentiated products, with difficult entry.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    49 views12 pages

    Lesson 3 The Market Structures

    Uploaded by

    Athena Ly
    This document discusses different types of market structures: 1) Perfect competition is characterized by many small firms and identical products. Entry and exit is easy. 2) Monopoly is dominated by a single seller of a unique product, with high barriers to entry. 3) Monopolistic competition has many differentiated products and easy entry/exit, with competition on non-price factors. 4) Oligopoly has a few large firms that can impact prices of homogeneous or differentiated products, with difficult entry.

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    The Market Structures

    Lesson 3
    Market Structure

     Is a classification system for the key traits of a market,


    including the number of firms, the similarity of the
    products they sell, and the ease of entry into and exit
    from the market structure
    Types of Market Structure

    1.Perfect competition
    2.Monopoly
    3.Monopolistic competition
    4.Oligopoly
    1. Perfect Competition

    Is a market structure characterized by


    1. Large number of small firms
    1. Each firm has no significant share of total output
    and therefore no ability to affect the product’s
    price
    2. Homogenous/Identical products
    3. Very easy entry and exit from the market
    Examples:
     Agricultural sector
     Street food vendors
    2. Monopoly

    Is a market structure characterized by


    1. A single seller or producer
    2. A unique product
    3. Impossible entry into the market
    1. Sole ownership of a vital resource
    2. Legal barriers like government franchise and
    licenses
    3. Economies of scale
    Examples:
    3. Monopolistic competition

    Is a market structure characterized by


    1. Many large firms
    2. Differentiated products
    3. Easy market entry and exit

    Under this structure, rivalry centers on non – price


    factors in addition to price competition.

    Product differentiation – is the process of creating


    real or apparent difference between goods and
    services sold in the market
    4. Oligopoly
    Is a market structure characterized by
    1. Few sellers
    1. These firms are so large relative to the total market that they
    can affect the market price
    2. Either a homogenous or differentiated product
    3. Difficult market entry
    1. Financial requirements
    2. Control over essential resources
    3. Patent rights
    4. Economies of scale
    Examples:
     Cable Television Services
     Entertainment Industries (Music and Film)
     Airline Industry
     Pharmaceuticals
     Computer & Software Industry
     Cellular Phone Services
     Smart Phone and Computer Operating Systems
     Oil and Gas
     Auto Industry
    Special Types of Market Structure
    1. Bilateral monopoly – is a market condition comprising
    one seller and only one buyer
    2. Bilateral oligopoly – is a market condition with a
    significant degree of seller concentration and a
    significant degree of buyer concentration
    3. Duopsony – is a market situation in which there are
    only two buyers but many sellers
    4. Duopoly – is a subset of oligopoly describing a market
    situation in which there are only two suppliers
    5. Monopsony – is a form of buyer concentration, i.e a
    market situation in which a single buyer confronts
    many small suppliers

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