This document summarizes four types of market structures: pure competition, monopolistic competition, oligopoly, and monopoly. It describes the key characteristics of each structure, including the number of sellers, product differentiation, barriers to entry and exit, and how firms influence prices. The structures range from pure competition, with many sellers of homogeneous products, to monopoly, with a single seller of unique products and barriers to new competition.
This document summarizes four types of market structures: pure competition, monopolistic competition, oligopoly, and monopoly. It describes the key characteristics of each structure, including the number of sellers, product differentiation, barriers to entry and exit, and how firms influence prices. The structures range from pure competition, with many sellers of homogeneous products, to monopoly, with a single seller of unique products and barriers to new competition.
This document summarizes four types of market structures: pure competition, monopolistic competition, oligopoly, and monopoly. It describes the key characteristics of each structure, including the number of sellers, product differentiation, barriers to entry and exit, and how firms influence prices. The structures range from pure competition, with many sellers of homogeneous products, to monopoly, with a single seller of unique products and barriers to new competition.
Pure Competition • Many buyers and sellers and none can influence the market • Products and services offered are homogenous • Free entry and exit of firms in and out of the industry • If you add perfect knowledge pure competition becomes perfect competition Monopolistic Competition • One unique seller with loyal customers • Product or service is differentiated • Free entry and exit of firms in and out of the industry Oligopoly • There are a few sellers that may “collude” • They may form a “Cartel” after collusion • Entry and exit is restricted • Products and services are differentiated Monopoly • One seller who represents the industry (Price Maker) • One product or service with no close substitutes • No entry for new sellers and no exit for existing seller – Price discrimination – Monopoly power Monopolistic Pure Competition Competition Oligopoly Pure monopoly
No influence 100% influence
Summary Market Pure Monopolistic Oligopoly Monopoly Structure Competition Competition Number of Many Many but there Few One sellers are distinct sellers Type of product Homogenous Differentiated Differentiated One product or or service service with no close substitutes Entry and Exit Free Free Restricted No entry and of firms in and no exit out of the industry Distinct Perfect Loyal Collusion may Price maker Characteristic Knowledge Consumers form a cartel