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Overview of Market Structures

This document outlines and defines different types of market structures: 1) Monopolistic competition involves many producers selling differentiated products that are not perfect substitutes for one another. Firms take rivals' prices as given and ignore the impact of their own prices. 2) Oligopoly describes a market with a small number of firms that together control most of the market share. 3) Perfect competition involves no barriers to entry, an unlimited number of producers and consumers, and prices determined solely by demand and supply.

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Bea Cassandra Gutierrez Ednilao
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4 views1 page

Overview of Market Structures

This document outlines and defines different types of market structures: 1) Monopolistic competition involves many producers selling differentiated products that are not perfect substitutes for one another. Firms take rivals' prices as given and ignore the impact of their own prices. 2) Oligopoly describes a market with a small number of firms that together control most of the market share. 3) Perfect competition involves no barriers to entry, an unlimited number of producers and consumers, and prices determined solely by demand and supply.

Uploaded by

Bea Cassandra Gutierrez Ednilao
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Types of market structures[edit]

Monopolistic competition, a type of imperfect competition such that many producers sell
products 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.

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.
Perfect competition, a theoretical market structure that features no barriers to entry, an

unlimited number of producers and consumers, and a perfectly elastic demand curve.

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