Market Structure refers to
- the number and size of firms
- nature of the product sold and
- ease of entry of new firms into a particular industry
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What can markets be analyzed in terms of?
- Structure: number and size, barriers to entry and nature of product.
Conduct: pricing and output policies of firms in the industry.
Performance: economic efficiency of firms and extent of consumer welfare.
What are the characteristics of Perfect Competition?
- Pure or atomistic competition
- large number of sellers selling
- homogenous (identical) products who have
- little to no influence over price or output with
- free or unrestricted entry into the industry.
- price takers as they accept the market price.
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What are the characteristics of Monopolistic Competition?
- imperfect competition
- large number of sellers
- entry in and out of the market is relatively easy
- sells products which may physically be similar but slightly differentiated by brand name, packaging, etc.
- tend to be price takers since they have rel
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What are the characteristics of Oligopoly?
- imperfect competition
- few large firms dominating the market in terms of sales, output and employment
- differentiated products
- high barriers to entry
- tend to be interdependent
- price makers as they have considerable market power to set prices.
-
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What are the characteristics of Duopoly?
- imperfect competition
- two large firms
- differentiated products
- high barriers to entry
- price makers
Example: Aviation industry
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What are the characteristics of Monopoly?
- one large dominant firm
- unique products and few substitutes
- high barriers to entry
- price makers
- earn supernormal profit
Example: steel industry, PNG Power (in PNG)
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What are the characteristics of Monopsony?
- one buyer, many sellers
- has wealth of power
- controlling advantage that drives its consumption price levels down.
- experience low prices from wholesalers and an advantage in paid wages
Example: primary supplier of jobs or buyer of a single product s
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Other cards in this set
Card 2
Front
- Structure: number and size, barriers to entry and nature of product.
Conduct: pricing and output policies of firms in the industry.
Performance: economic efficiency of firms and extent of consumer welfare.
- Pure or atomistic competition
- large number of sellers selling
- homogenous (identical) products who have
- little to no influence over price or output with
- free or unrestricted entry into the industry.
- price takers as they accept the market price.
Back
Card 5
Front
- imperfect competition
- large number of sellers
- entry in and out of the market is relatively easy
- sells products which may physically be similar but slightly differentiated by brand name, packaging, etc.
- tend to be price takers since they have rel
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