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Everyone!
MOTIVATION
Differentiate Various
Market Structures
TABLE OF CONTENTS.
01 02 03
Then, we will talk about
We will talk about this We will talk about Monopolistic
Market Structures
Monopoly competition

04 05
After that we will talk
We will also talk about
about Perfect
Oligopoly
Competition
WE WILL TALK
ABOUT MARKET
STUCTURES
DID YOU KNOW?
A market is one of the numerous infrastructures,
systems, institutions, social relations, and
procedures, wherein buyers and sellers usually
interact with each other to exchange goods and
services.
 DID YOU KNOW?
Market structures are the key points in evaluating business’
economic environments. It deals with strategic decision making and
focuses on both economics and marketing, making professional
changes
entrepreneurs precisely judge industry, policy changes, and market
news. The significant operational definition of market structure is a
concern to both economists and marketers since they have different
methodological approaches in this, and each of them has their
strengths and weaknesses.
These are the most notable characteristics of
market structures:

● The relationship between a seller to another seller, a seller to his/her buyer,

and many more.

● The product that has been sold and the extent of product differentiation,
which affects cross-price elasticity of demand.

● The number of companies or corporations, including the scale and range of

competition, in the market

● The concerns in entering and exiting the market.

The interactions and variations in these aspects provided the
existence of different market structures, which are the following:

Monopolistic Perfect
Monopoly Oligopoly
Competition Competition,
Herein, there is a There are few
single merchant In which sellers of a
of a product for A similar standardized or a
differentiated
which there is no differentiated
close alternative
product has product has product.
many vendors many sellers.
WE WILL TALK
ABOUT
MONOPOLY
A monopoly pertains to a situation where in there is only a
single company that produces a certain product in the entire
market. Because of that, they have the power or the authority to
manipulate their products, such as minimizing their outputs to
put higher prices in it and to gain more profit. In this situation,
consumers have a lesser benefit, especially when the product is
essential to them, making them buy it despite being expensive.

Examples : Microsoft, Facebook, Windows,

DeBeers, Diamonds
Monopolies commonly emerge because there is a high barrier to
entry and exit in a particular market. The three main factors
that can become the reason for it are the following.

Economies of scale – In
some sectors, a single
firm can sustain products Government Regulation
Ownership of a – To suffice the interest
fundamental resource – or goods at a lower price
than two or more firms of the public,the
If the key resource is government
solely owned by a firm, could, resulting in a
usually restricts market
the firm can limit the natural monopoly, which
entries in a legal way,
access to this source, arises even without the
which is through
therefore creating a intervention of the
copyright
monopoly. government.
laws and patents.
 “Frankly said, monopolies are usually unwelcomed to
society because it can cause deadweight loss by producing
lesser outputs than the competitive ones, yet still, have
higher prices. However, the government can react to these
by demanding price
regulations, establishing competition laws, nationalizing the
monopolies, or by not
doing anything at all”
LET’S TRY
Directions: State if the given situation is a MONOPOLY or NOT.
1. Barbara went to the market yesterday to look for a cosmetic
product.She bought 5 pieces of it and they all have different brands.
2. Your mom asked you to buy a Brand A Pancit Canton in Aling
Nena’s Store. Sadly, they ran out of it so you just bought Brand X
Pancit Canton.
3. Achilles owns the only Art Shop in their town that’s why he raised
each material’s price and limited the products they make.
4. Jason went to the mall last week to purchase a gift for Clara. He then
noticed that there was a newly opened accessory shop and bought a
necklace for her despite being too expensive.
5. Your friend opened a cake shop. He then asked you to come and buy
some. You can’t complain so you ended up buying one.
WE WILL TALK
ABOUT
MONOPOLISTIC
COMPETITION
When there is a numerous quantity of small firms
competing against each other, it is called a
Monopolistic Competition. However, in this type of
market structure, several companies sell the same
product but they have their differences. Those
differences give them market power which lets them
charge higher prices for a product, but is within a
certain range. These key factors can include style,
brand name, location, packaging, advertisement, and
pricing strategies, which became every firm’s basis in
marketing.

Examples : Fastfood, Hotels, Bakery shops,

Clothing shops,
The characteristics of monopolistic competition
include the following:

Companies
Each company
The presence Companies are Free entry compete based
produces on product
of many not price takers and exit in
similar but quality, price,
companies the industry
differentiated and how the
products product is
marketed
Let’s TRY
1.Cynthia recently opened her milk tea shop. A few weeks later, her friend,
Vilma, also opened one. They both sell the same product, which is milk tea,
but it is different in terms of style, packaging, and advertisement.
2. Edward owns a pizza shop, and it is the only one in their town. Due to that,
he decided to lessen the pizzas they produce every day to put a higher price
on it.
3.You went to the market to buy a dress for your sister. A floral dress and a sexy dress
caught your attention. You are sure that those are exactly your sister’s type, but they are
from different shops. In the end, you chose the floral one because you trust its brand.
4. Elsa wants to buy shoes for her son, but she can’t choose whether it should be Nike or
Jordan. She then called her son to ask him, and he said he prefers Jordan.
5. Alfredo owns the only butchery shop in their village. Every morning, customers line
up in front of his store to buy one because it easily gets out of stock.
WE WILL TALK
ABOUT
PERFECT
COMPETITION
Perfect competition is a type of market structure where
many products are similar and may substitute each
other since they have the same features, price and,
quality. There are many sellers and consumers in this
type of market with almost the same products.
Moreover, a perfectly competitive market requires few
barriers to enter and it is easy for producers to quit
whenever they want. They also have uniform prices
that depend on the demand and supply which means
that the market has full control over implying prices.

Example : Farmers’ markets

Perfectly competitive markets show these characteristics:

● Both the producers and consumers have perfect knowledge without

information failures. The details and information in this market are
easily accessible to all participants. Thus, risk-taking is not necessarily
important and the power of an entrepreneur is limited.
Perfectly competitive markets show these characteristics:

● Producers and consumers are making coherent decisions for their

benefit. For instance, producers make decisions to maximize their
profits, and consumers make decisions to maximize their utility.
● There are no hindrances to enter nor exit from this type of market.
Perfectly competitive markets show these characteristics:

● Companies manufacture identical products that are not branded

● Producers don’t have the power to influence the market price nor the
condition.
WE WILL TALK
OLIGOPOLY
An oligopoly is a type of market structure where
firms dominate the market by supplying either
similar or differentiated products. There are only a
few companies in this structure and they have
control over price implying. It is also difficult to
enter this market since there are a lot of barriers.
Moreover, participants in oligopolies are price
setters rather than takers. Some examples of
oligopoly companies are the automobile industry,
the steel industry, aircraft manufacturing industry,
etc.

Coca-Cola and Pepsi, Technology and Media

Industries ,
Oligopoly markets show these characteristics:

There are a lot of barriers. It

includes government licenses,
● Entrepreneurs economies of scale, patents, and
maximize profits. access to expensive and
complex technology. Also, some
● Oligopolies set government policies are favoring
prices rather the currentcompanies in the
industry so it is hard to enter for
than take price beginners.
Oligopoly markets show these characteristics:

● Interdependent. Like for ● Rampant advertising

example, if one firm change
and decreases its price,It
will significantly affect the
other firms.
since most companies
use national media to
promote their products.
ACTIVITY
TIME!