What is a market structure?
Refers to the characteristics of a market (number of firms, barriers to entry and competition)
List the 4 main categories of market structure
- Perfect competition- may firms produce identical produtcs
- Monopolistic competiton- many firms product slightly differentitated products
- Oligopoly- a few large firms dominate the market
- (pure) Monopoly- a single firm supplies the whole market
Why are some markets competitive?
Markets are competitive when firms are free to enter or leave an industry (no barriers)
What are barriers to entry?
Obstacles that restrict firms breaking into a market and competing with established firms
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