ABM Applied Economics Module 5 Evaluating The Viability and Impacts of Business On The Community

Applied Economics
Quarter 1 – Module 5:
Differentiating Various Market
Structure
Applied Economiccs
Alternative Delivery Mode
Quarter 1 – Module 1: Title
First Edition, 2020
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Applied Economics
Quarter 1 – Module 5:
Introductory Message
For the facilitator:
Welcome to the Applied Economics for Grade 12 Alternative Delivery Mode

(ADM) Module on Differentiating Market Structures!
This module was collaboratively designed, developed and reviewed by educators both
from public and private institutions to assist you, the teacher or facilitator in helping
the learners meet the standards set by the K to 12 Curriculum while overcoming
their personal, social, and economic constraints in schooling.
This learning resource hopes to engage the learners into guided and independent
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needs and circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module:
Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.
As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to manage
their own learning. Furthermore, you are expected to encourage and assist the
learners as they do the tasks included in the module.
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For the learner:
Welcome to Applied Economics for Grade 12 Alternative Delivery Mode (ADM) Module
on Differentiating Market Structures !
The hand is one of the most symbolized part of the human body. It is often used to
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This module was designed to provide you with fun and meaningful opportunities for
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This module has the following parts and corresponding icons:
What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.
What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.
What’s In This is a brief drill or review to help you link

the current lesson with the previous one.
What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.
What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.
What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.
What I Have Learned This includes questions or blank

sentence/paragraph to be filled in to process
what you learned from the lesson.
What I Can Do This section provides an activity which will

help you transfer your new knowledge or skill
into real life situations or concerns.
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Assessment This is a task which aims to evaluate your
level of mastery in achieving the learning
competency.
Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.
Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:
References This is a list of all sources used in developing

this module.
The following are some reminders in using this module:
1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
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If you encounter any difficulty in answering the tasks in this module, do not
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We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!
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What I Need to Know
This module was designed and written with you in mind. It is here to help you master
differentiating various market structures in terms of: a number of sellers; b. types of
products; c. entry/exit to market; d. pricing power and e. others. The scope of this
module permits it to be used in many different learning situations. The language
used recognizes the diverse vocabulary level of students. The lessons are arranged
to follow the standard sequence of the course. But the order in which you read them
can be changed to correspond with the textbook you are now using.
The module is divided into six lessons, namely:

 Lesson 1. Identifying a market structure
 Lesson 2. Differentiating various market structure in terms of number of
sellers
 Lesson 3. Differentiating various market structure in terms of types of
products
 Lesson 4. Differentiating various market structure in terms of entry/exit to
market
 Lesson 5. Differentiating various market structure in terms of pricing power
 Lesson 6. Differentiating various market structure in other terms
After going through this module, you are expected to:

1. Identify a market structure.
2. Differentiate a market structure in terms of number of sellers.
3. Differentiate a market structure in terms of types of products.
4. Differentiate a market structure in terms of entry/exit to market.
5. Differentiate a market structure in terms of pricing power.
6. Differentiate a market structure in other terms.
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What I Know
Give the correct answer on the space provided before each number. Pick the
answer inside the box given below:
Scarcity Needs Wants Production
Consumption Economics Microeconomics
Resources Macroeconomics Household economics
_________________1. The wise production and use of wealth to meet the demands or
needs of people.
_________________2. A situation wherein the amount of something available is
insufficient to satisfy the desire for it.
_________________3. Is the use of inputs to produce outputs.
_________________4. Deals with the economic behavior of the whole economy or its
aggregate such as government, business, unemployment, inflation and the like.
_________________5. Deals with the economic behavior of the individual units such
as consumers, firms, the owners of factors of productions.
_________________6. Things that you can’t live without it.
_________________7. The labor, capital, land and natural resources and
entrepreneurship that are used to produce goods and services.
_________________8. Most common use of economics is for the family.
_________________9. Desires.
________________10. Is the use of a good or service.
Lesson
1
Identifying a Market Structure
You have learned how to determine the implications of market pricing on

economic decision making in the past lesson. Now, you will learn how to how to
identify a market structure.
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What’s In
Write the correct letter of your answer on the space provided before each
number.
______________1. A place where there are buyers and sellers who are actively engaged
in buying and selling.
a. Market c. Mall
b. Supermarket d. Place
______________2. A market structure where there are large numbers of sellers and
buyers.
a. Perfect competition c. oligopoly
b. Monopolistic competition d. monopoly
______________3. It is a market structure in which there is only a single seller of the
product .
______________4. Which of the following statements is NOT a statement of
“Economics as a Science”?
a. Economics has long been a popular college major for individuals who are
intending to work in business.
b. It is an organized body of truth, coordinated, arranged and systematized
with reference to certain general laws and principles.
c. Economic analysis seeks to explain economic events using some kind of
logic based on a set of systematic relations.
d. The subject matter of economics is people or societies and their behavior,
unpredictable in nature.
______________5. Which is NOT a characteristic of a monopolistic competition?
a. Large number of firms c. product differentiation
b. Difficulty in entry and exit d. price policy
_______________6. It is a market structure in which there is only a single seller of the
product .
_______________7. This refers to the labor, capital, land and natural resources and
a. Land b. resources c. capital d. labor
_______________8. A situation wherein the amount of something available is

a. Scarcity b. demand c. need d. wants
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_______________9. The law which states that as you continue to consume a
product, you will eventually get less additional satisfaction from each unit you
consume.
a. Law of supply c. law of diminishing marginal utility
b. b. law of demand d. none of the above
______________10. Involves economists taking generally accepted theory and

applying those theories to something that is happening in the real world, with an
eye toward determining what can reasonably be expected to happen next.
a. Applied economics c. macroeconomics
b. Economics d. microeconomics
What’s New
What are our basic daily needs? How about our wants? Where do we go to
acquire our needs/wants? People cannot live without their daily needs and
sometimes their wants. Our basic daily needs include our food, shelter and clothing.
Nowadays, our needs do not limit only to these three but it already consists of our
wants such as electricity, transportation, appliances, gadgets, as well as internet
connection among others. We buy all these in the market.
A market is a place where people go to buy their daily needs. According to
Philip Kotler, it is an area or atmosphere of potential exchange. A market is not just
a place that we used to go for buying our needs, it is where competition for customers,
consumers or buyers and sellers or producers is very much common. As students,
you are familiar with this word. In the classroom, you compete for grades,
recognition, awards and honors. There are several competitions being held in school
such as talents, sports, and other extra-curricular activities. There are beauty
contest such as the Miss Universe, Miss World, Miss Earth, Binibining Pilipinas, etc.
A market has also its structure. A Market Structure is an environment
where buyers and sellers operate and compete in the market. A place where there is
competition. A place where there will be characteristics of the market that affects
the behavior and interaction of buyers and sellers and they can be identified through
the number of sellers, types of products, entry/exit to market, pricing power and
other terms.
There are four structures in the market. They are:
1. Perfect competition
2. Monopoly
3. Monopolistic Competition
4. Oligopoly
These market structure will be discussed in the succeeding lessons.
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What is It
A market is a place where people go to buy things that they need. A place of
competition for sellers exist. A market structure identifies how a market is made
up in terms of number of sellers, types of products, entry/exit to market, pricing
power, others terms. There are four types of market structures namely: Perfect
competition, monopoly, monopolistic competition and oligopoly.
What’s More
Answer on a space provided after each question.
What type of a market structure do you think is in a supermarket?

________________________________________________________________________
What type of a market structure do you think is a telecommunication like
Globe, Smart, TalknText, TM?
_____________________________________________________
What type of a market structure do you think are the energy/power supply?
Water supply? __________________________________________________________________
What type of a market structure do you think are those who sells basic
commodities like agricultural products?
____________________________________________________
How about broadcast/radio/television stations?

____________________________
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What I Have Learned
Give a statement about the following words/statement below:

Market
Market structure
Terms in order to identify a market structure.
Types of market structure.
What I Can Do
Go to a place where you buy your needs. Observe what is happening

around as to its terms such as number of sellers, types of products, entry/exit to
market, pricing power and other terms. Write your observation on the space
provided below. (Attached an extra sheet of paper if you need).
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
____________________.
Assessment
Write the correct answer on the space provided before the number.
_________________1. A place where buyers and sellers interact and compete.
_________________2. It identifies how a market is made up.
3-6 4 terms to identify a market structure.
7-10 4 types of a market structure.
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Additional Activities
Below is a two-column table. On the left, list down at least 10 basic needs of your
family while on the right is the place where you buy those needs/products.
BASIC NEEDS WHERE TO BUY(MARKET)
What I Know
Answer on the space provided below.
Define Market and Market Structure.
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
_________________________________________________________________________________.
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Lesson
2
Structure in Terms of Number of
Sellers
Now that you already know of the definition of a market and a market
structure, let us now identify a market structure in terms of the number of sellers.
What’s In
Below are industries offering their products to consumers//customers. On

the opposite side, give the corresponding number of sellers that you know that
provide them.
INDUSTRIES NUMBER OF SELLERS/WHO OFFERS THE PRODUCTS
Agricultural products_______________________________________________
(rice, fish, meat, vegetables, etc.)
Electricity _______________________________________________
Water _______________________________________________
Telecommunications _______________________________________________
Cars _______________________________________________
Toothpaste _______________________________________________
Cement _______________________________________________
Dentists _________________________________________________
Water Refilling Station ______________________________________________
SM Supermarket _________________________________________________
TV Stations _________________________________________________
Banks _________________________________________________
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What’s New
A market structure can be identified in terms of its number of sellers. Take a

look at the images below.
How many number of sellers do these markets have? ____________.
13
How many sellers do this industry have?_______________ .
How many sellers do this industry have? __________________.
14
How many sellers do this industry have? ______________________.
15
What is It
Perfect Competition
This is an ideal market where competition is perfect. Perfect in the sense

that sellers and buyers are /large, vying for something to sell and to buy.
Competition is perfect because everyone is knowledgeable everything about what
everyone is selling as well as its price.
Monopolistic Competition
In this market structure, there are also large/many number of buyers and
sellers but not everyone has the knowledge of what his competitor is selling. Its
sellers are lesser in number than in the perfect competition.
Oligopoly
This market structure has small/few number of sellers since capitalization

in this type of market structure needs a very huge capital investment.
Monopoly
As the name suggest, mono means one. Therefore, this market structure has
one seller selling the product or service.
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What’s More
Here are some example of firms or industries under each type of market
structures.
Perfect Competition : agricultural products such as poultry, dairy, meat,
vegetables, rice, fish among others.
Monopolistic Competition: toothpaste, soaps, shampoos, curls, biscuits,
tissue papers, diapers, etc.
Oligopoly: Cars, Malls, Cement, telecommunications industry, fast food
chains, television/radio stations, banks, gasoline stations, etc
Monopoly: Maynilad (for Manila water consumers), Meralco (for Manila
energy consumers), Noneco (for certain parts of Negros Occidental electricity
consumers), usually public utility needs and specialized jobs.
What I Have Learned
Write the number of sellers on the opposite side below for each market
structure.
Perfect Competition __________________________________
Monopolistic Competition __________________________________
Oligopoly __________________________________
Monopoly __________________________________
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What I Can Do
Below are industries/ firms and products or services. On the opposite side,
write the market structure whether it is perfect competition, monopolistic
competition, oligopoly, monopoly to the firm or industry and products or services.
1. Jag apparel _____________________________
2. Colgate _____________________________
3. Sardines _____________________________
4. Medicines _____________________________
5. Bacolod City Water District _____________________________
6. Central Market _____________________________
7. Vallacar Transit _____________________________
(a bus company in Negros Occidental)
8. Ayala Malls _____________________________
9. Davao City Water District _____________________________
10. Mitsubishi _____________________________
Assessment
Identify what type of market structure is providing for each type of product
below.
1. Eggs
2. Water
3. News
4. Banks
5. Rice
6. Electricity
7. Softdrinks
8. Bread
9. Cigarettes
10. Pharmaceutical
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Identify how many number of sellers is providing for each type of

product below.
1. Eggs
2. Water
3. News
4. Banks
5. Rice
6. Electricity
7. Softdrinks
8. Bread
9. Cigarettes
10. Pharmaceutical
What I Know
Now that you know types of market structure in terms of the number of
sellers, now let us have the market structure in terms of the types of products
being produce by the company to be sold to the consumers.
Lesson Differentiating Market Structure in

3 Terms of the type of products
What’s In
What type of market structure do you think produces these products listed
below:
1. Chocolates ________________________________________
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2. Beauty soap ________________________________________
3. Vegetables ________________________________________
4. Water ________________________________________
5. Paracetamol ________________________________________
6. Shoes ________________________________________
7. Electric wires ________________________________________
8. Fruits ________________________________________
9. Aluminum ________________________________________
10. Plumbers ________________________________________
What’s New
In order to identify a market structure, we have to know what type of

products the company/seller produces. In this term, products can be
homogeneous/identical, similar, differentiated or no product differentiation,
differentiated/highly substitutable, or one/unique product only.
What products do you think this market produces? ______________________
20
What product do you think this market produces? ______________________
21
What product do you think this market produces? _____________________
What product do you think this market produces? ___________________
What is It
Perfect Competition
In a Perfect Competition market, products are homogeneous where many

sellers are offering the same products to buyers. Sellers are in the same place
where buyers go and every one in the place knows what kind of products are being
sold and how much is the price therefore, competition is perfect. Products being
sold in this market structure are agricultural products like vegetables, meat,
poultry, rice, fish, among others.
Products being produced here are differentiated but highly substituted. Just
like the image of shampoos above, there are many types of shampoos in the
market, differentiated but they can be substituted with other brands if the other
brand is not available. Just like with the brands of soaps and other beauty
products, they can be identified through the benefits they provide to their
customers.
Oligopoly
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Products in this market have similar, little or no differentiation. They can be
identified since there are just a few offering the products. Examples are cigarettes,
cars, aluminum, medicine.
Monopoly
There is a single producer with no close substitute in this type of market.

There is just one supplier for this type of product.
What’s More
structures.


What I Have Learned
In this lesson we have learned that in terms of the types of products being sold to
costumers, whether it is homogeneous or identical, similar, little differentiation or
differentiated, differentiated but substitutable, one/unique product, we can identify
a market structure.
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What I Know
Now that you already know the market structure in terms of its types
of products being produced or sold to the market, let us learn the types of
market structure in terms of its entry and exit to market.
Lesson
Differentiating Market Structure in
4 terms of entry and exit to market
What’s In
Below are products being sold in the market. State whether the entry and exit to
market of these products is difficult (with barriers), or easy (without barriers). For
difficult (with barriers) answer, please state what do you think are those barriers.
Products Difficult/Easy Possible Barriers
1. Appliances _____________________ _____________________
2. Construction firms ________________________ _____________________
3. Sugarcane ________________________ _____________________
4. Airlines ________________________ _____________________
5. Fitness Gym ________________________ _____________________
6. Resorts ________________________ _____________________
7. Laundry shops ________________________ _____________________
8. Hotel and Restaurants ________________________ _____________________
9. Rice retail ________________________ _____________________
10. Grocery store ________________________ ____________________
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What’s New
Barriers to entry are hindrances or obstacles that make it difficult for a firm
or individual to enter a given market. These are the reasons why other firms or
individual who would like to put up a business fails. Below are the most common
barriers to entry into a given market.
1. Government regulation. This is one barrier for someone who would like
to start up a business. Before someone can start up a business, he/she has to
seek for government’s approval in the form of a business permit or license to
operate. If the government requires so many requirements for an individual to
operate a business, this would be a barrier to that person/firm.
2. Start- up costs. Initial Capital or capital investment is large if for example
you wanted to put up a factory for sardines. You have to construct a factory
building, buy for machines, employ a large number of employees (casual or
permanent), and so on and so forth.
3. Technology. Technology nowadays is very much important in business

but its acquisition needs a huge amount of money if you wanted to employ or use
technology in your business. Though this can be very useful, this can also be a
barrier to entry of some of the business.
4. Economies of scale. An existing radio or television stations are more

prominent and successful than those who would like to start up a business. They
are already stable and have their consumers who have their loyalty with them while
new ones would mean more advertisement, promotion and other costs
accompanied by the starting up of a new business.
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What is It
There are barriers to entry of some of the types of market structure but there
are those who do not have. Let’s see if what type of a market structure is easy or
difficult to enter and leave the market.
1. Perfect competition. There is no barrier to enter with this type of market

structure. Anyone can join with the market or start-up a business since its entry
and exit is easy.
2. Monopolistic competition. There is no or little barrier to entry with this type of

market structure. Its little barrier may be an amount of money to be used for
advertisement and promotion since products being sold here are almost similar but
differentiated in terms of the value and use it will offer to its consumers.
3. Oligopoly. Entry to this market structure is difficult. There are a number of

barriers to those who would like to enter into this type of market structure such as
huge amount of capitalization, economies of scale, control over raw materials,
among others.
4. Monopoly. Here, entry and exit is very difficult or blocked so that no other
seller or producer can enter the market for competition. Barriers to entry are
stringent government regulations huge amount of capitalization and lack or control
of raw materials.
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What’s More
Identify whether barriers to entry is easy, difficult or blocked in each market

structure.
Products Market structure Barriers to entry and exit
1. Sea products __________________ ________________________
2. Subdivisions __________________ ________________________
3. Poultry products __________________ ________________________

4. Mining industry __________________ ________________________
5. Water __________________ ________________________
6. Toothpaste __________________ ________________________

7. Farm products __________________ ________________________
8. Grocery stores __________________ ________________________
9. Construction firms __________________ ________________________
10. Soft drinks __________________ ________________________
27
What I Have Learned
What type of market structure has no barriers or easy to entry and exit ? Give
example and explain why
__________________________________________________________________________________
_______________________________________________________________.
What type of market structure has barriers or difficult to entry and exit? Give
__________________________________________________________________________________
________________________________________________________________.
What type of market structure has a barrier or almost blocked to entry and exit?
Give example and explain why
__________________________________________________________________________________
________________________________________________________________.
What I Can Do
If you were to choose a market structure in terms of barriers to entry and exit,
what type of market structure would you prefer? Why? Explain your answer.
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Assessment
There are several reasons to barriers to entry and exit of a certain products.
In each situation below, state whether it because of government regulations,
economies of scale, supply of raw materials, or large amount of capitalization.
_______________________ 1. Mr. De Juan wanted to put up a gasoline station. He
already has a lot and an amount of money enough to construct the gasoline station
but he has difficulty in looking for supplier of fuel and oil.
________________________2. There is an existing factory for wine in a province at the
north. At the southern part, Mr Lobres wanted to put up another wine factory but
the government did not allowed Mr. Lobres to put up another one because the
residents in that particular place did not give the Environmental Compliance
Certificate for the project.
________________________3. It is the dream of a young entrepreneur Ms. Young to put
up a prestigious beauty salon in their place. But this beauty salon she wants to
have a franchise with requires her to put up an amount not enough at the moment.
________________________4. Dorothy and Rhodora are siblings who wanted to put up
a fast food chain. There are already several prestigious fast food chain with a name
in the place. This is now the reason why Dorothy and Rhodora are having a hard
time in planning for strategies that they will use to compete with the well-known
fast food chains.
Give at least five (5) firms/industries/markets and state whether its barriers
are easy or difficult or blocked. For difficult or blocked barriers, state its reason
behind.
1. _________________________________________________________________
2. _________________________________________________________________
3. _________________________________________________________________
4. _________________________________________________________________
5. _________________________________________________________________
29
What I Know
You have learned from the previous lesson that there are possible barriers to
entry and exit of a particular market structure. What are they?
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
______________________________________________.
In this lesson, we are going to learn about
Lesson Various Market Structure in

5 Terms of Pricing Power
What’s In
Answer the correct letter of your choice to the space provided before each number.
___________1. The seller has the complete power over the price of the product.
A. Perfect competition C. Oligopoly
B. Monopolistic competition D. Monopoly
___________2. The seller has some control over the price of the product depending
on the quality and product differentiation.
C. Monopolistic competition D. Monopoly
____________3. The seller of this market structure agrees for the price of the products
since they are interdependent with each other.
____________4. Buyers and sellers in this market structure do not have the impact
on the price-setting of the product.
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What’s New
Why is it that before an individual or a firm starts up with his business, he

would hire someone to have a feasibility study of the needs of customers that would
make him buy the product? Because if that product is really a need of a person,
he/she will buy it whatever it costs. How does pricing power affect the revenue as
well as the company’s income through its pricing power?
Illustration 1 . In a wet market, those who are selling fishes, vegetables and fruits
knows the price of each of the products. Everyone has the knowledge of the prices
of the goods one is selling. Also, customers know that everything in that place has
almost the same price, all that he has to do is to find something that he/she sees the
good is of good quality. Here, constant customers “suki” plays a big role in getting a
good revenue. But who has the power over the price of the product? Why do you say
so? _________________________________________________________________________.
Illustration 2. Noneco is an electric company in the Northern part of Negros
Occidental. It is the sole producer of electricity power from San Carlos city up to EB
Magalona. What do you think is the pricing power of Noneco? Why do you say so?
________________________________________________________________________.
Illustration 3. Mc Donalds and Jollibee are two biggest fast food chain in the
country. They have to employ promotions and advertisement in order to catch up
for customers. What do you think is the pricing power of these two fast food chains?
Aside from promotions and advertisements, what more could they employ to gain
and attract more customers?
__________________________________________________________________________________
______________________________________________________________.
Illustration 4. Sugarcane is one of the livelihood in various parts of the country

especially here in Negros province, producing sugar through a factory. Here in
Negros Occidental, there are only three (3) sugarcane factories. How will this
situation affect the pricing power of the sugarcane factory? Why?
__________________________________________________________________________________
_______________________________________________________________.
31
What is It
Price does affects the purchasing power of an individual. As always,

customers tend to resort to a more lesser price than the other product if it also has
the same quality and specification that the customer looks after the product.
What is then the pricing power of the four (4) market structures? How do they
price their products? Let’s learn it in this lesson.
Perfect competition. In this market structure, there is a large number of
buyers and sellers that no individual decision-maker can significantly influence the
price of the product. Here, the seller is the price taker. He has to follow the price of
his products to the price of the products of his competitors so that he will not be left
out with the sale of his products. For example, the price of the tomato per kilo in the
market is Php50.00, the buyers know that everyone who is selling tomatoes in the
place is selling it at the cost of Php50.00.
Monopolistic Competition. Here, perfect and monopolistic competition is
combined where products are differentiated and entry and exit are easy. Since
customers love to have a variety of goods to choose from, products in this market
structure are differentiated. Products are differentiated by its brand, model, style
and many other features that the company will see to it that his product is unique
from the other offers in the market. Therefore, the company can set or control over
the price and quantity of the product because of its unique characteristic though it
is just the same with the other products but certainly not identical. Let’s say for
example in toothpaste, there is this toothpaste with salt, charcoal, lime, among
others as choices that will suit to the need and taste of some individual. There is
also this so- called as for sensitive, for whitening, for stronger teeth, etc.
In this market structure, the company is the price-setter.

Oligopoly. In this market structure where there are several barriers to entry
and exit, the action of each firm affects each other. Companies of the same products
agree and fix the price of their product since whatever price they will put to it,
customers will still have to buy for it since it is a need or necessity. Companies here
sets for the price of the product. For example, oil companies if you notice have almost
the same oil prices. This is because oil companies agree for the price of the oil as
maintained by the OPEC (Organization of Petroleum Exporting Countries).
Monopoly. Since only a single seller sells the product, consumers always
have a bad image of this type of market structure. Consumers’ perceived the
company to jack up prices of their goods since consumers don’t have any choice but
to consume their product because they are the only one selling or producing it. The
company here is free to set its price therefore, the government has to have a law that
will protect the consumers if ever the company tends to give a much higher price of
their product.
32
What’s More
Below are products or companies. Write down on the space provided whether
it is a price taker or a price setter. Also, write the market structure on the blank
provided after.
Product/company Price setter/price taker Market structure

1. Beauty soap ___________________ ____________________
2. Oil companies ___________________ ____________________
3. Rice retail ___________________ ____________________

4. Pharmaceutical companies ___________________ ____________________
5. Vegetables ___________________ ____________________
6. Detergent soap ___________________ ____________________

7. Railway transit ___________________ ____________________
8. Sugarcane factories ___________________ ____________________
9. Fruits ___________________ ____________________

10. Motorcycle ___________________ ____________________
33
What I Have Learned
Price is determined by whether the seller or the buyer. On the side of the
seller, it is whether he sets the price or he takes the price set by the buyer. Below
are market structure. Put a check on the box if the market structure as a seller
sets the price or takes the price.
Market structure Sets the price Takes the price
Perfect Competition
Oligopoly
Monopoly
What I Can Do
Give at least three products or companies under each Market structure and
write whether it is a price- setter or price-taker.
______________________ ________________________
_______________________ ________________________
_______________________ ________________________
2. Monopolistic competition
________________________ ________________________
_________________________ _________________________
_________________________ _________________________
3. Oligopoly _________________________ _________________________

_________________________ _________________________
_________________________ _________________________
4. Monopoly _________________________ _________________________

_________________________ _________________________
_________________________ _________________________
34
Assessment
On the left side of the table below are products or companies. Write down on
the next box the market structure and whether it sets the or takes the price.
Products/companies Market structure Sets the price/takes the
price
1. Notebooks
2. Cement
3. Appliances
4. Cellphones
5. Electricity
6. Cigarettes
7. Cars
8. Meat
9. Fruits
10. Ready to wear
clothes
Make a summary of the things that you have learned in this lesson. Write
your answer on the space provided below.
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
.
35
What I Know
Write the correct letter of your choice on the space provided before each number.
_________1. A market structure that sells homogeneous or identical products.
_________2. A market structure who controls the price because he is the only
supplier or seller of the product/service.
_________3. A market structure which is difficult for its entry or exit because of
barriers such as economies of scale, large capitalization, etc.
_________4. A market structure which has similar but differentiated products being
offered to the market. These products are so many in the market.
_________5. A market structure where government intercedes because they may set
a very high price of the product since they are the only one selling the product.
_________6. A market structure in which they set and agree for the price of their
products because they are interdependent with each other.
_________7. A market structure which needs a large amount of capitalization to
finance for their factories, machineries and manpower as well as advertising and
promotion.
__________8. A market structure where it is easy for entry and exit.
__________9. A market structure wherein it is difficulty for its entry and exit
because of the rare source of its raw materials and blocked by the government.
__________10. A market structure which sets the price for its similar but
differentiated products.
36
6 other terms
What’s In
There are already four (4) terms that would differentiate a market structure
from each other. They are?
1.
2.
3.
4.
What do you think are the other terms that would differentiate a market
structure from each other?
What’s New
Aside from the terms that can differentiate a market structure stated above,
there are still other terms to help us identify a market structure.
What do you think are still the things that you wanted to know about the
market structure? Is it how a market structure is managed? Or is it how being
known to the customers and competitors? Also, What do you think of the curve of
the demand and supply of each market structure?
Another two (2) terms in which a market structure can be identified is
through the
1. degree of knowledge of economic agents regarding prices, costs, demand

and supply conditions; and
2. the demand and supply curve of each market structure.
These two (2) cannot all be observed in all of the market structures, these are
just additional terms that can help us identify and differentiate a market structure.
37
What is It
The degree of knowledge of economic agents regarding prices, costs, demand

and supply conditions does not exist in all three market structures except in a perfect
competition. Here, the buyers and sellers has all the knowledge of the prices, costs,
and demand and supply conditions. In other market structures, this term does not
exists because all of the three market structures really compete for each other and
so all the information about their companies and products are all kept to themselves
neither the buyers or the sellers know all the aspects of the market.
For the demand and supply curve, here are the curve of the following market
structures:
1. Perfect competition. In this market structure, the market demand and

supply curve is a downward sloping line. As the price increases, quantity demand
decrease. As the price decrease, quality demand increases. At the equilibrium price,
the price at which quantity demand equals quantity supplied. Here, the buyers and
sellers are both satisfied.
Y
Price market supply

_ _ _ _ _ _ E_ _ _ _ _ _ _ _ _ _ _ Equilibrium price
market demand
X Quantity
38
2. Monopolistic Competition. This market structure has also a downward
sloping line. This suggests that if the firm wanted to sell more in the market, he
has to lower its price.
Price Y
P1 --------------------
X Quantity
Q Q1
The arrows represent that if there will be firs coming out as a close
substitute of the product, the demand curve shifts to the left which means the
demand for such product will decrease. But if there will no close substitute for the
product, the demand for the product increases therefore the curve shifts to the
right.
3. Oligopoly. This market structure has a sticky and inflexible or a kinked
curve. This means that markets here are interdependent with each other, if one of
the firm here changes its price, other firms revenue will also be affected. This is
why the the curve is inelastic as with the other market structures.
Price Y d
P _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _P
O M output X
Upper P is more elastic in the presumption that if one firm changes its price
to a more lower one and if other firms do not change its price, the firm loses its
market share. In the lower p, if all the firms change its price, there will be little
change in the revenue and change in the market share. This market structure
does not have its fixed demand and supply curve since if one firm changes its price,
other firms will also change its price since the price of the other affects other firms
also.
39
4. Monopoly. Since there is only one product in the market selling it, the
demand curve will be the same with the demand curve of the product. It is
downward sloping because of the law of demand.
Consider the table below
Marginal Revenue (MR) is equal to the change in revenue over the change in
quantity.
* Average Revenue and Marginal Revenue are both negatively sloped
* Marginal Revenue curve lies halfway between Average Revenue curve and Y
* Average Revenue cannot be zero but Marginal Revenue can be zero or negative.
A monopolistic firms marginal revenue is not its cost. Marginal revenue is
always below its price.
40
What’s More
Answer on the space provided after each question below.

1. What do you think is the reason behind why other market structures do
not have the knowledge of each other aside from a perfect competition structure?
2. Draw a graph for each type of market structure with label.
What I Have Learned
Answer on the space provided below after each question.

1. What are the two (2) other terms in differentiating a market structure?
_________________________________________________________________________
2. Describe the graph of the four market structures.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________.
What I Can Do
Find a different market structure in your community. If you can, have an

interview with the owner/manager of the company. Formulate questions and find
out if the other terms in differentiating a market structure exist in their company.
Discuss this in a space provided below. Provide additional paper if necessary.
41
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
________________________________________________________________.
Assessment
Answer the correct letter of your choice on the space provided before each
number.
___________1. The only market structure in which information is open to all its
competitors.
___________2. The market structure which has a sticky and inflexible demand curve.
A.Perfect competition C. Oligopoly
___________3. The equilibrium price in this market structure is reached when the
quantity demanded equals the quantity supplied.
___________4. The market structure which has a downward sloping curve because if
he firm wanted to sell more in the market, he has to lower its price.
___________5. The market structure where in the demand curve of the product is the
same with the law of demand curve.
___________6. The market structure where in the graph, upper P for the price is more
elastic the its lower p with the assumption that if one of the firms producing the
same product lowers its price and the other firms remain constant, firms who remain
constant will lose its market share.
____________7. The market structure where both the buyers and the sellers are both
satisfied in the equilibrium price.
42
____________8. The market structure wherein the seller cannot sell his/her product
beyond the selling price because there is the perfect knowledge of the price of a
certain product.
____________9. The market structure where AR and MR are both negatively sloped.
____________10. The market structure wherein the curve will shift to the left if the
demand for the product increases but if there is no close substitute for the product
the demand will increase and it will shift to the right.

On the next page, summarized all the terms in differentiating market

structures in an essay format. Use additional sheet of paper if necessary.
43
What I Need to Know
This module was designed and written with you in mind. It is here to help you master
differentiating various market structures in terms of: a number of sellers; b. types of
products; c. entry/exit to market; d. pricing power and e. others. The scope of this
module permits it to be used in many different learning situations. The language
used recognizes the diverse vocabulary level of students. The lessons are arranged
to follow the standard sequence of the course. But the order in which you read them
can be changed to correspond with the textbook you are now using.
The module is divided into six lessons, namely:

 Lesson 1. Identifying a market structure
 Lesson 2. Differentiating various market structure in terms of number of
sellers
 Lesson 3. Differentiating various market structure in terms of types of
products
 Lesson 4. Differentiating various market structure in terms of entry/exit to
market
 Lesson 5. Differentiating various market structure in terms of pricing power
 Lesson 6. Differentiating various market structure in other terms
After going through this module, you are expected to:

8. Identify a market structure.
9. Differentiate a market structure in terms of number of sellers.
10. Differentiate a market structure in terms of types of products.
11. Differentiate a market structure in terms of entry/exit to market.
12. Differentiate a market structure in terms of pricing power.
13. Differentiate a market structure in other terms.
1
What I Know
Give the correct answer on the space provided before each number. Pick the
answer inside the box given below:
Scarcity Needs Wants Production
Consumption Economics Microeconomics
Resources Macroeconomics Household economics
_________________1. The wise production and use of wealth to meet the demands or
needs of people.
_________________2. A situation wherein the amount of something available is
_________________3. Is the use of inputs to produce outputs.
_________________4. Deals with the economic behavior of the whole economy or its
aggregate such as government, business, unemployment, inflation and the like.
_________________5. Deals with the economic behavior of the individual units such
as consumers, firms, the owners of factors of productions.
_________________6. Things that you can’t live without it.
_________________7. The labor, capital, land and natural resources and
_________________8. Most common use of economics is for the family.
_________________9. Desires.
________________10. Is the use of a good or service.
Lesson
1
Identifying a Market Structure
You have learned how to determine the implications of market pricing on

economic decision making in the past lesson. Now, you will learn how to how to
identify a market structure.
2
What’s In
Write the correct letter of your answer on the space provided before each
number.
______________1. A place where there are buyers and sellers who are actively engaged
in buying and selling.
a. Market c. Mall
b. Supermarket d. Place
______________2. A market structure where there are large numbers of sellers and
buyers.
c. Perfect competition c. oligopoly
d. Monopolistic competition d. monopoly
______________3. It is a market structure in which there is only a single seller of the
product .
c. Perfect competition c. oligopoly
d. Monopolistic competition d. monopoly
______________4. Which of the following statements is NOT a statement of
“Economics as a Science”?
e. Economics has long been a popular college major for individuals who are
intending to work in business.
f. It is an organized body of truth, coordinated, arranged and systematized
with reference to certain general laws and principles.
g. Economic analysis seeks to explain economic events using some kind of
logic based on a set of systematic relations.
h. The subject matter of economics is people or societies and their behavior,
unpredictable in nature.
______________5. Which is NOT a characteristic of a monopolistic competition?
c. Large number of firms c. product differentiation
d. Difficulty in entry and exit d. price policy
_______________6. It is a market structure in which there is only a single seller of the
product .
_______________7. This refers to the labor, capital, land and natural resources and
b. Land b. resources c. capital d. labor
_______________8. A situation wherein the amount of something available is

b. Scarcity b. demand c. need d. wants
3
_______________9. The law which states that as you continue to consume a
product, you will eventually get less additional satisfaction from each unit you
consume.
c. Law of supply c. law of diminishing marginal
utility
d. b. law of demand d. none of the above
______________10. Involves economists taking generally accepted theory and

applying those theories to something that is happening in the real world, with an
eye toward determining what can reasonably be expected to happen next.
c. Applied economics c. macroeconomics
d. Economics d. microeconomics
What’s New
What are our basic daily needs? How about our wants? Where do we go to
acquire our needs/wants? People cannot live without their daily needs and
sometimes their wants. Our basic daily needs include our food, shelter and clothing.
Nowadays, our needs do not limit only to these three but it already consists of our
wants such as electricity, transportation, appliances, gadgets, as well as internet
connection among others. We buy all these in the market.
A market is a place where people go to buy their daily needs. According to
Philip Kotler, it is an area or atmosphere of potential exchange. A market is not just
a place that we used to go for buying our needs, it is where competition for customers,
consumers or buyers and sellers or producers is very much common. As students,
you are familiar with this word. In the classroom, you compete for grades,
recognition, awards and honors. There are several competitions being held in school
such as talents, sports, and other extra-curricular activities. There are beauty
contest such as the Miss Universe, Miss World, Miss Earth, Binibining Pilipinas, etc.
A market has also its structure. A Market Structure is an environment
where buyers and sellers operate and compete in the market. A place where there is
competition. A place where there will be characteristics of the market that affects
the behavior and interaction of buyers and sellers and they can be identified through
the number of sellers, types of products, entry/exit to market, pricing power and
other terms.
There are four structures in the market. They are:
6. Monopoly
7. Monopolistic Competition
8. Oligopoly
These market structure will be discussed in the succeeding lessons.
4
What is It
A market is a place where people go to buy things that they need. A place of
competition for sellers exist. A market structure identifies how a market is made
up in terms of number of sellers, types of products, entry/exit to market, pricing
power, others terms. There are four types of market structures namely: Perfect
competition, monopoly, monopolistic competition and oligopoly.
What’s More
Answer on a space provided after each question.
What type of a market structure do you think is in a supermarket?

________________________________________________________________________
What type of a market structure do you think is a telecommunication like

Globe, Smart, TalknText, TM?
_____________________________________________________
What type of a market structure do you think are the energy/power supply?
Water supply? __________________________________________________________________
What type of a market structure do you think are those who sells basic
commodities like agricultural products?
____________________________________________________
How about broadcast/radio/television stations?
____________________________
5
What I Have Learned
Give a statement about the following words/statement below:

Market
Market structure
Terms in order to identify a market structure.
Types of market structure.
What I Can Do
Go to a place where you buy your needs. Observe what is happening

around as to its terms such as number of sellers, types of products, entry/exit to
market, pricing power and other terms. Write your observation on the space
provided below. (Attached an extra sheet of paper if you need).
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
____________________.
Assessment
Write the correct answer on the space provided before the number.
_________________1. A place where buyers and sellers interact and compete.
_________________2. It identifies how a market is made up.
3-6 4 terms to identify a market structure.
7-10 4 types of a market structure.
6
Below is a two-column table. On the left, list down at least 10 basic needs of your
family while on the right is the place where you buy those needs/products.
BASIC NEEDS WHERE TO BUY(MARKET)
References
Applied Economics by Rosemary P. Dinio, PhD and George A. Villasis
What I Know
Answer on the space provided below.
Define Market and Market Structure.
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
7
Lesson
2
Structure in Terms of Number of
Sellers
Now that you already know of the definition of a market and a market
structure, let us now identify a market structure in terms of the number of sellers.
What’s In
Below are industries offering their products to consumers//customers. On

the opposite side, give the corresponding number of sellers that you know that
provide them.
INDUSTRIES NUMBER OF SELLERS/WHO OFFERS THE PRODUCTS
Agricultural products_______________________________________________
(rice, fish, meat, vegetables, etc.)
Electricity _______________________________________________
Water _______________________________________________
Telecommunications _______________________________________________
Cars _______________________________________________
Toothpaste _______________________________________________
Cement _______________________________________________
Dentists _________________________________________________
Water Refilling Station ______________________________________________
SM Supermarket _________________________________________________
TV Stations _________________________________________________
Banks _________________________________________________
8
What’s New
A market structure can be identified in terms of its number of sellers. Take a

look at the images below.
How many sellers do this industry have?_______________ .
9
How many sellers do this industry have? __________________.
How many sellers do this industry have? ______________________.
10
What is It
Perfect Competition
This is an ideal market where competition is perfect. Perfect in the sense

that sellers and buyers are /large, vying for something to sell and to buy.
Competition is perfect because everyone is knowledgeable everything about what
everyone is selling as well as its price.
In this market structure, there are also large/many number of buyers and
sellers but not everyone has the knowledge of what his competitor is selling. Its
sellers are lesser in number than in the perfect competition.
Oligopoly
This market structure has small/few number of sellers since capitalization

in this type of market structure needs a very huge capital investment.
Monopoly
As the name suggest, mono means one. Therefore, this market structure has
one seller selling the product or service.
11
What’s More
structures.
What I Have Learned
Write the number of sellers on the opposite side below for each market
structure.
Perfect Competition __________________________________
Monopolistic Competition __________________________________
Oligopoly __________________________________
Monopoly __________________________________
12
What I Can Do
Below are industries/ firms and products or services. On the opposite side,
write the market structure whether it is perfect competition, monopolistic
competition, oligopoly, monopoly to the firm or industry and products or services.
11. Jag apparel _____________________________
12. Colgate _____________________________
13. Sardines _____________________________
14. Medicines _____________________________
15. Bacolod City Water District _____________________________
16. Central Market _____________________________
17. Vallacar Transit _____________________________
(a bus company in Negros Occidental)
18. Ayala Malls _____________________________
19. Davao City Water District _____________________________
20. Mitsubishi _____________________________
Assessment
Identify what type of market structure is providing for each type of product
below.
11. Eggs
12. Water
13. News
14. Banks
15. Rice
16. Electricity
17. Softdrinks
18. Bread
19. Cigarettes
20. Pharmaceutical
13
Identify how many number of sellers is providing for each type of

product below.
1. Eggs
2. Water
3. News
4. Banks
5. Rice
6. Electricity
7. Softdrinks
8. Bread
9. Cigarettes
10. Pharmaceutical
References
14
What I Know
Now that you know types of market structure in terms of the number of
sellers, now let us have the market structure in terms of the types of products
being produce by the company to be sold to the consumers.

3 Terms of the type of products
What’s In
What type of market structure do you think produces these products listed
below:
11. Chocolates ________________________________________
12. Beauty soap ________________________________________
13. Vegetables ________________________________________
14. Water ________________________________________
15. Paracetamol ________________________________________
16. Shoes ________________________________________
17. Electric wires ________________________________________
18. Fruits ________________________________________
19. Aluminum ________________________________________
20. Plumbers ________________________________________
15
What’s New
In order to identify a market structure, we have to know what type of

products the company/seller produces. In this term, products can be
homogeneous/identical, similar, differentiated or no product differentiation,
differentiated/highly substitutable, or one/unique product only.
What products do you think this market produces? ______________________
What product do you think this market produces? ______________________
What product do you think this market produces? _____________________
16
What product do you think this market produces? ___________________
What is It
Perfect Competition
In a Perfect Competition market, products are homogeneous where many

sellers are offering the same products to buyers. Sellers are in the same place
where buyers go and every one in the place knows what kind of products are being
sold and how much is the price therefore, competition is perfect. Products being
sold in this market structure are agricultural products like vegetables, meat,
poultry, rice, fish, among others.
Products being produced here are differentiated but highly substituted. Just
like the image of shampoos above, there are many types of shampoos in the
market, differentiated but they can be substituted with other brands if the other
brand is not available. Just like with the brands of soaps and other beauty
products, they can be identified through the benefits they provide to their
customers.
Oligopoly
Products in this market have similar, little or no differentiation. They can be
identified since there are just a few offering the products. Examples are cigarettes,
cars, aluminum, medicine.
Monopoly
There is a single producer with no close substitute in this type of market.

There is just one supplier for this type of product.
17
What’s More
structures.


What I Have Learned
In this lesson we have learned that in terms of the types of products being
sold to costumers, whether it is homogeneous or identical, similar, little
differentiation or differentiated, differentiated but substitutable, one/unique
product, we can identify a market structure.
18
What I Can Do
Listed below are products which you will identify whether it is

homogeneous, similar, little differentiation or differentiated, differentiated but
substitutable, or unique products and identify what type of market structure is it.
1. Sugar ______________________ _______________________

2. Coffee ______________________ _______________________
3. Motorcycle ______________________ _______________________
4. Refrigerators ______________________ _______________________
5. Welders ______________________ _______________________
6. Smart ______________________ _______________________
(dishwashing)
7. Smart _______________________ _______________________
(telecommunications)
8. Milk fish _______________________ _______________________
9. Milk _______________________ _______________________
(dairy product)
10. Specialized Doctors _________________ _______________________
Assessment
Identify the type of market structure these products being produced or sold
to customers in terms of its types of products.
Product type of product type of market
structure
1. Corn ________________________ ___________________
2. Banks ________________________ ___________________
3. RTW ________________________ ___________________
4. Bananas ________________________ ___________________
5. Malls ________________________ ___________________
6. Hollow blocks ________________________ ___________________
7. Motorcycles ________________________ ___________________
8. Laptops ________________________ ___________________
9. Flower pots ________________________ ___________________
10. Appliances ________________________ ___________________
19
Give at least two products being sold to the market in terms of the
types of products as homogeneous, similar/differentiated,
differentiated/substitutable, one or unique product in consideration to its
type of market structure.
References

Study.com
20
What I Know
Now that you already know the market structure in terms of its types
of products being produced or sold to the market, let us learn the types of
market structure in terms of its entry and exit to market.
Lesson
Differentiating Market Structure in
4 terms of entry and exit to market
What’s In
Below are products being sold in the market. State whether the entry and exit
to market of these products is difficult (with barriers), or easy (without barriers).
For difficult (with barriers) answer, please state what do you think are those barriers.
Products Difficult/Easy Possible Barriers
1. Appliances _____________________ _____________________
2. Construction firms ________________________ _____________________
3. Sugarcane ________________________ _____________________
4. Airlines ________________________ _____________________
5. Fitness Gym ________________________ _____________________
6. Resorts ________________________ _____________________
7. Laundry shops ________________________ _____________________
8. Hotel and Restaurants ________________________ _____________________
21
9. Rice retail ________________________ _____________________
10. Grocery store ________________________ _____________________
What’s New
Barriers to entry are hindrances or obstacles that make it difficult for a firm
or individual to enter a given market. These are the reasons why other firms or
individual who would like to put up a business fails. Below are the most common
barriers to entry into a given market.
5. Government regulation. This is one barrier for someone who would like
to start up a business. Before someone can start up a business, he/she has to
seek for government’s approval in the form of a business permit or license to
operate. If the government requires so many requirements for an individual to
operate a business, this would be a barrier to that person/firm.
6. Start- up costs. Initial Capital or capital investment is large if for example

you wanted to put up a factory for sardines. You have to construct a factory
building, buy for machines, employ a large number of employees (casual or
permanent), and so on and so forth.
7. Technology. Technology nowadays is very much important in business

but its acquisition needs a huge amount of money if you wanted to employ or use
technology in your business. Though this can be very useful, this can also be a
barrier to entry of some of the business.
8. Economies of scale. An existing radio or television stations are more
prominent and successful than those who would like to start up a business. They
are already stable and have their consumers who have their loyalty with them while
new ones would mean more advertisement, promotion and other costs
accompanied by the starting up of a new business.
22
What is It
There are barriers to entry of some of the types of market structure but there
are those who do not have. Let’s see if what type of a market structure is easy or
difficult to enter and leave the market.
5. Perfect competition. There is no barrier to enter with this type of market
structure. Anyone can join with the market or start-up a business since its entry
and exit is easy.
6. Monopolistic competition. There is no or little barrier to entry with this type of

market structure. Its little barrier may be an amount of money to be used for
advertisement and promotion since products being sold here are almost similar but
differentiated in terms of the value and use it will offer to its consumers.
7. Oligopoly. Entry to this market structure is difficult. There are a number of
barriers to those who would like to enter into this type of market structure such as
huge amount of capitalization, economies of scale, control over raw materials,
among others.
8. Monopoly. Here, entry and exit is very difficult or blocked so that no other
seller or producer can enter the market for competition. Barriers to entry are
stringent government regulations huge amount of capitalization and lack or control
of raw materials.
23
What’s More
Identify whether barriers to entry is easy, difficult or blocked in each market

structure.
Products Market structure Barriers to entry and exit
11. Sea products __________________ ________________________
12. Subdivisions __________________ ________________________
13. Poultry products __________________ ________________________

14. Mining industry __________________ ________________________
15. Water __________________ ________________________
16. Toothpaste __________________ ________________________

17. Farm products __________________ ________________________
18. Grocery stores __________________ ________________________
19. Construction firms __________________ ________________________
20. Soft drinks __________________ ________________________
24
What I Have Learned
What type of market structure has no barriers or easy to entry and exit ? Give
__________________________________________________________________________________
_______________________________________________________________.
What type of market structure has barriers or difficult to entry and exit? Give
__________________________________________________________________________________
________________________________________________________________.
What type of market structure has a barrier or almost blocked to entry and exit?
Give example and explain why
__________________________________________________________________________________
________________________________________________________________.
What I Can Do
If you were to choose a market structure in terms of barriers to entry and exit,
what type of market structure would you prefer? Why? Explain your answer.
25
Assessment
There are several reasons to barriers to entry and exit of a certain products.
In each situation below, state whether it because of government regulations,
economies of scale, supply of raw materials, or large amount of capitalization.
_______________________ 1. Mr. De Juan wanted to put up a gasoline station.
He already has a lot and an amount of money enough to construct the gasoline
station but he has difficulty in looking for supplier of fuel and oil.
________________________2. There is an existing factory for wine in a province at the
north. At the southern part, Mr Lobres wanted to put up another wine factory but
the government did not allowed Mr. Lobres to put up another one because the
residents in that particular place did not give the Environmental Compliance
Certificate for the project.
________________________3. It is the dream of a young entrepreneur Ms. Young to put
up a prestigious beauty salon in their place. But this beauty salon she wants to
have a franchise with requires her to put up an amount not enough at the moment.
________________________4. Dorothy and Rhodora are siblings who wanted to put up
a fast food chain. There are already several prestigious fast food chain with a name
in the place. This is now the reason why Dorothy and Rhodora are having a hard
time in planning for strategies that they will use to compete with the well-known
fast food chains.
26
Give at least five (5) firms/industries/markets and state whether its barriers
are easy or difficult or blocked. For difficult or blocked barriers, state its reason
behind.
6. _________________________________________________________________
7. _________________________________________________________________
8. _________________________________________________________________
9. _________________________________________________________________
10. _________________________________________________________________
References

Study.com
27
What I Know
You have learned from the previous lesson that there are possible barriers to
entry and exit of a particular market structure. What are they?
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
______________________________________________.
In this lesson, we are going to learn about
Lesson Various Market Structure in Terms of

5 Pricing Power
What’s In
Answer the correct letter of your choice to the space provided before each number.
___________1. The seller has the complete power over the price of the product.
D. Perfect competition C. Oligopoly

E. Monopolistic competition D. Monopoly
___________2. The seller has some control over the price of the product depending
on the quality and product differentiation.
B. Perfect competition C. Oligopoly
F. Monopolistic competition D. Monopoly
28
____________3. The seller of this market structure agrees for the price of the products
since they are interdependent with each other.
C. Perfect competition C. Oligopoly
D. Monopolistic competition D. Monopoly
____________4. Buyers and sellers in this market structure do not have the impact
on the price-setting of the product.
What’s New
Why is it that before an individual or a firm starts up with his business, he
would hire someone to have a feasibility study of the needs of customers that would
make him buy the product? Because if that product is really a need of a person,
he/she will buy it whatever it costs. How does pricing power affect the revenue as
well as the company’s income through its pricing power?
Illustration 1 . In a wet market, those who are selling fishes, vegetables and fruits
knows the price of each of the products. Everyone has the knowledge of the prices
of the goods one is selling. Also, customers know that everything in that place has
almost the same price, all that he has to do is to find something that he/she sees the
good is of good quality. Here, constant customers “suki” plays a big role in getting a
good revenue. But who has the power over the price of the product? Why do you say
so? _________________________________________________________________________.
29
Illustration 2. Noneco is an electric company in the Northern part of Negros
Occidental. It is the sole producer of electricity power from San Carlos city up to EB
Magalona. What do you think is the pricing power of Noneco? Why do you say so?
________________________________________________________________________.
Illustration 3. Mc Donalds and Jollibee are two biggest fast food chain in the
country. They have to employ promotions and advertisement in order to catch up
for customers. What do you think is the pricing power of these two fast food chains?
Aside from promotions and advertisements, what more could they employ to gain
and attract more customers?
__________________________________________________________________________________
______________________________________________________________.
Illustration 4. Sugarcane is one of the livelihood in various parts of the country
especially here in Negros province, producing sugar through a factory. Here in
Negros Occidental, there are only three (3) sugarcane factories. How will this
situation affect the pricing power of the sugarcane factory? Why?
__________________________________________________________________________________
_______________________________________________________________.
What is It
Price does affects the purchasing power of an individual. As always,

customers tend to resort to a more lesser price than the other product if it also has
the same quality and specification that the customer looks after the product.
What is then the pricing power of the four (4) market structures? How do they
price their products? Let’s learn it in this lesson.
Perfect competition. In this market structure, there is a large number of
buyers and sellers that no individual decision-maker can significantly influence the
price of the product. Here, the seller is the price taker. He has to follow the price of
30
his products to the price of the products of his competitors so that he will not be left
out with the sale of his products. For example, the price of the tomato per kilo in the
market is Php50.00, the buyers know that everyone who is selling tomatoes in the
place is selling it at the cost of Php50.00.
Monopolistic Competition. Here, perfect and monopolistic competition is

combined where products are differentiated and entry and exit are easy. Since
customers love to have a variety of goods to choose from, products in this market
structure are differentiated. Products are differentiated by its brand, model, style
and many other features that the company will see to it that his product is unique
from the other offers in the market. Therefore, the company can set or control over
the price and quantity of the product because of its unique characteristic though it
is just the same with the other products but certainly not identical. Let’s say for
example in toothpaste, there is this toothpaste with salt, charcoal, lime, among
others as choices that will suit to the need and taste of some individual. There is
also this so- called as for sensitive, for whitening, for stronger teeth, etc.
In this market structure, the company is the price-setter.
Oligopoly. In this market structure where there are several barriers to entry
and exit, the action of each firm affects each other. Companies of the same products
agree and fix the price of their product since whatever price they will put to it,
customers will still have to buy for it since it is a need or necessity. Companies here
sets for the price of the product. For example, oil companies if you notice have almost
the same oil prices. This is because oil companies agree for the price of the oil as
maintained by the OPEC (Organization of Petroleum Exporting Countries).
Monopoly. Since only a single seller sells the product, consumers always
have a bad image of this type of market structure. Consumers’ perceived the
company to jack up prices of their goods since consumers don’t have any choice but
to consume their product because they are the only one selling or producing it. The
company here is free to set its price therefore, the government has to have a law that
will protect the consumers if ever the company tends to give a much higher price of
their product.
What’s More
Below are products or companies. Write down on the space provided whether
it is a price taker or a price setter. Also, write the market structure on the blank
provided after.
Product/company Price setter/price taker Market structure
1. Beauty soap ___________________ ____________________
2. Oil companies ___________________ ____________________

3. Rice retail ___________________ ____________________
31
4. Pharmaceutical companies ___________________ ____________________
5. Vegetables ___________________ ____________________

6. Detergent soap ___________________ ____________________
7. Railway transit ___________________ ____________________
8. Sugarcane factories ___________________ ____________________

9. Fruits ___________________ ____________________
10. Motorcycle ___________________ ____________________
What I Have Learned
Price is determined by whether the seller or the buyer. On the side of the
seller, it is whether he sets the price or he takes the price set by the buyer. Below
are market structure. Put a check on the box if the market structure as a seller
sets the price or takes the price.
Market structure Sets the price Takes the price
Perfect Competition
Oligopoly
Monopoly
What I Can Do
Give at least three products or companies under each Market structure and
write whether it is a price- setter or price-taker.
32
______________________ ________________________
_______________________ ________________________
_______________________ ________________________
6. Monopolistic competition
________________________ ________________________
_________________________ _________________________
_________________________ _________________________
7. Oligopoly _________________________ _________________________
_________________________ _________________________
_________________________ _________________________
8. Monopoly _________________________ _________________________
_________________________ _________________________
_________________________ _________________________
Assessment
On the left side of the table below are products or companies. Write down on
the next box the market structure and whether it sets the or takes the price.
Products/companies Market structure Sets the price/takes the
price
11. Notebooks
12. Cement
13. Appliances
14. Cellphones
15. Electricity
16. Cigarettes
17. Cars
18. Meat
19. Fruits
20. Ready to wear
clothes
33
Make a summary of the things that you have learned in this lesson. Write
your answer on the space provided below.
___________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
.
References
What I Know
Write the correct letter of your choice on the space provided before each
number.
_________1. A market structure that sells homogeneous or identical products.
_________2. A market structure who controls the price because he is the only
supplier or seller of the product/service.
34
_________3. A market structure which is difficult for its entry or exit because of
barriers such as economies of scale, large capitalization, etc.
_________4. A market structure which has similar but differentiated products being
offered to the market. These products are so many in the market.
_________5. A market structure where government intercedes because they may set
a very high price of the product since they are the only one selling the product.
_________6. A market structure in which they set and agree for the price of their
products because they are interdependent with each other.
_________7. A market structure which needs a large amount of capitalization to

finance for their factories, machineries and manpower as well as advertising and
promotion.
__________8. A market structure where it is easy for entry and exit.
__________9. A market structure wherein it is difficulty for its entry and exit
because of the rare source of its raw materials and blocked by the government.
__________10. A market structure which sets the price for its similar but
differentiated products.
35
6 other terms
What’s In
There are already four (4) terms that would differentiate a market structure
from each other. They are?
5.
6.
7.
8.
What do you think are the other terms that would differentiate a market
structure from each other?
What’s New
Aside from the terms that can differentiate a market structure stated above,
there are still other terms to help us identify a market structure.
What do you think are still the things that you wanted to know about the
market structure? Is it how a market structure is managed? Or is it how being
known to the customers and competitors? Also, What do you think of the curve of
the demand and supply of each market structure?
Another two (2) terms in which a market structure can be identified is

through the
3. degree of knowledge of economic agents regarding prices, costs, demand

and supply conditions; and
4. the demand and supply curve of each market structure.
36
These two (2) cannot all be observed in all of the market structures, these are
just additional terms that can help us identify and differentiate a market structure.
What is It
The degree of knowledge of economic agents regarding prices, costs, demand

and supply conditions does not exist in all three market structures except in a perfect
competition. Here, the buyers and sellers has all the knowledge of the prices, costs,
and demand and supply conditions. In other market structures, this term does not
exists because all of the three market structures really compete for each other and
so all the information about their companies and products are all kept to themselves
neither the buyers or the sellers know all the aspects of the market.
For the demand and supply curve, here are the curve of the following market
structures:
5. Perfect competition. In this market structure, the market demand and

supply curve is a downward sloping line. As the price increases, quantity demand
decrease. As the price decrease, quality demand increases. At the equilibrium price,
the price at which quantity demand equals quantity supplied. Here, the buyers and
sellers are both satisfied.
Price market supply
_ _ _ _ _ _ E_ _ _ _ _ _ _ _ _ _ _ Equilibrium price
market demand
X Quantity
37
6. Monopolistic Competition. This market structure has also a downward
sloping line. This suggests that if the firm wanted to sell more in the market, he
has to lower its price.
Price Y
P1 --------------------
X Quantity
Q Q1
The arrows represent that if there will be firs coming out as a close
substitute of the product, the demand curve shifts to the left which means the
demand for such product will decrease. But if there will no close substitute for the
product, the demand for the product increases therefore the curve shifts to the
right.
7. Oligopoly. This market structure has a sticky and inflexible or a kinked
curve. This means that markets here are interdependent with each other, if one of
the firm here changes its price, other firms revenue will also be affected. This is
why the the curve is inelastic as with the other market structures.
Price Y d
P _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _P
O M output X
Upper P is more elastic in the presumption that if one firm changes its price
to a more lower one and if other firms do not change its price, the firm loses its
market share. In the lower p, if all the firms change its price, there will be little
38
change in the revenue and change in the market share. This market structure
does not have its fixed demand and supply curve since if one firm changes its price,
other firms will also change its price since the price of the other affects other firms
also.
8. Monopoly. Since there is only one product in the market selling it, the
demand curve will be the same with the demand curve of the product. It is
downward sloping because of the law of demand.
9. Consider the table below
39
Marginal Revenue (MR) is equal to the change in revenue over the change in
quantity.
* Average Revenue and Marginal Revenue are both negatively sloped
* Marginal Revenue curve lies halfway between Average Revenue curve and Y
* Average Revenue cannot be zero but Marginal Revenue can be zero or negative.
A monopolistic firms marginal revenue is not its cost. Marginal revenue is always
below its price.
What’s More
Answer on the space provided after each question below.

3. What do you think is the reason behind why other market structures do
not have the knowledge of each other aside from a perfect competition structure?
4. Draw a graph for each type of market structure with label.
What I Have Learned
Answer on the space provided below after each question.

3. What are the two (2) other terms in differentiating a market structure?
_________________________________________________________________________
4. Describe the graph of the four market structures.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________.
40
What I Can Do
Find a different market structure in your community. If you can, have an

interview with the owner/manager of the company. Formulate questions and find
out if the other terms in differentiating a market structure exist in their company.
Discuss this in a space provided below. Provide additional paper if necessary.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
________________________________________________________________.
Assessment
Answer the correct letter of your choice on the space provided before each
number.
___________1. The only market structure in which information is open to all its
competitors.
___________2. The market structure which has a sticky and inflexible demand curve.
___________3. The equilibrium price in this market structure is reached when the
quantity demanded equals the quantity supplied.
___________4. The market structure which has a downward sloping curve because if
he firm wanted to sell more in the market, he has to lower its price.
___________5. The market structure where in the demand curve of the product is the
same with the law of demand curve.
41
___________6. The market structure where in the graph, upper P for the price is more
elastic the its lower p with the assumption that if one of the firms producing the
same product lowers its price and the other firms remain constant, firms who remain
constant will lose its market share.
____________7. The market structure where both the buyers and the sellers are both
satisfied in the equilibrium price.
____________8. The market structure wherein the seller cannot sell his/her product
beyond the selling price because there is the perfect knowledge of the price of a
certain product.
____________9. The market structure where AR and MR are both negatively sloped.
____________10. The market structure wherein the curve will shift to the left if the
demand for the product increases but if there is no close substitute for the product
the demand will increase and it will shift to the right.

42
On the next page, summarized all the terms in differentiating market

structures in an essay format. Use additional sheet of paper if necessary.
References
https://www.youtube.com/watch?v=ZhGDce_a5eE
https://www.youtube.com/watch?v=8a3gXThQek0
Marketstructure…0430142231.pdf
Economicthoughtswithglenn.blogspot.com/2012/comparingmarketstructure.html
Study.com
43
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Applied Economics

Published by the Department of Education

Development Team of the Module

Printed in the Philippines by ________________________

Department of Education – Region VI Western Visayas

Office Address: Duran Street, Iloilo City

Welcome to the Applied Economics for Grade 12 Alternative Delivery Mode

Notes to the Teacher

This module has the following parts and corresponding icons:

What I Know This part includes an activity that aims to

What’s In This is a brief drill or review to help you link

What’s New In this portion, the new lesson will be

What is It This section provides a brief discussion of the

What’s More This comprises activities for independent

What I Have Learned This includes questions or blank

What I Can Do This section provides an activity which will

Additional Activities In this portion, another activity will be given

Answer Key This contains answers to all activities in the

At the end of this module you will also find:

References This is a list of all sources used in developing

The following are some reminders in using this module:

The module is divided into six lessons, namely:

After going through this module, you are expected to:

Scarcity Needs Wants Production

Consumption Economics Microeconomics

Resources Macroeconomics Household economics

You have learned how to determine the implications of market pricing on

_______________8. A situation wherein the amount of something available is

______________10. Involves economists taking generally accepted theory and

Answer on a space provided after each question.

What type of a market structure do you think is in a supermarket?

How about broadcast/radio/television stations?

Give a statement about the following words/statement below:

Go to a place where you buy your needs. Observe what is happening

Answer on the space provided below.

Define Market and Market Structure.

Below are industries offering their products to consumers//customers. On

A market structure can be identified in terms of its number of sellers. Take a

How many number of sellers do these markets have? ____________.

How many number of sellers do these markets have? ____________.

How many sellers do this industry have? __________________.

This is an ideal market where competition is perfect. Perfect in the sense

This market structure has small/few number of sellers since capitalization

What I Have Learned

Perfect Competition __________________________________

Monopolistic Competition __________________________________

Identify how many number of sellers is providing for each type of

Lesson Differentiating Market Structure in

7. Electric wires ________________________________________

10. Plumbers ________________________________________

In order to identify a market structure, we have to know what type of

What products do you think this market produces? ______________________

What product do you think this market produces? ___________________

In a Perfect Competition market, products are homogeneous where many

There is a single producer with no close substitute in this type of market.

Perfect Competition : agricultural products such as poultry, dairy, meat,

Oligopoly: Cars, Malls, Cement, telecommunications industry, fast food

What I Have Learned

1. Sea products ______

2. Subdivisions ______

3. Poultry products ______

5. Water ______

6. Toothpaste ______

8. Grocery stores ______

9. Construction firms ______

10. Soft drinks ______

2. Oil companies _ __

3. Rice retail _ __

5. Vegetables _ __

6. Detergent soap _ __

8. Sugarcane factories _ __

9. Fruits _ __

3. Oligopoly _ _

4. Monopoly _ _