Characteristics of Market Structures
- Market structures are the characteristics of the market in which a firm or industry operates
- These characteristics typically include:
- The number of buyers
- The number and size of firms
- The type of product in the market (homogenous or differentiated)
- The types of barriers to entry and exit
- The degree of competition between the firms in the market
- These characteristics typically include:
- Market structures can be separated into perfect competition and imperfect competition
- Imperfect competition includes the following market structures:
1. Monopolistic
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- A market structure is one in which there are many firms offering a similar product but with some product differentiation, e.g nail salons
- A market structure is one in which there are many firms offering a similar product but with some product differentiation, e.g nail salons
2. Oligopoly
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- A market structure in which a few large firms dominate the industry, with each firm having significant market power
- A market structure in which a few large firms dominate the industry, with each firm having significant market power
3. Monopoly
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- A market structure in which there is a single supplier of a particular product and has the power to influence the market supply and price