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Market Structures

Market Structures

Excerpt From this Document

How To Classify Markets

Economists classify markets according to conditions that prevail in them

Questions:

  • How many suppliers are there?
  • How large is each supplier?
  • Do the firms have any influence over price?
  • How much competition exists between firms?
  • What kind of economic product is involved?
  • Are the firms in the market selling exacly the same product or similar ones?
  • Is it easy or difficult for new firms to enter the market?

Market Structures

Definition:  the nature and degree of competition among firms operating in the same industry.

  • Pure competition
  • Monopolistic competition
  • Oligopoly
  • Monopoly

Pure Competition

  • Conditions for Pure Competition
  • Large number of buyers and sellers
  • Buyers and sellers deal in identical products
  • Each buyer and seller act independently
  • Buyers and sellers are well-informed about items for sale
  • Buyers and sellers are free to enter into, or conduct, or exit out of the business.
  • No separate advertising needed

No influence on price

About this Document

This was originally a lecture done on PowerPoint, but was converted to a pdf. You can still view it like a PowerPoint (without individual bullet points coming in separately) using the FULL SCREEN view mode on Adobe Acrobat (VIEW > Full Screen Mode). Topics covered: Pure Competition, Monopolistic Competition, Oligopoly. (Monopolies are covered in its own lecture)

Tags: Business, economics, Exercises & Activities, Grade 10, Grade 11, Grade 12, Grade 9, Teachers

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