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Edra, CZheimer
Barcelo, Crystal
Sibulan, Jovelyn
La Morena, Clarisse
Legazpi, Audrey
MARKET STRUCTURE
What is the Market Structure?
In economics, best defined as the organizational and other characteristics that significantly affect the
behavior and interaction of buyers and sellers of a market including:
Number and size of sellers and buyers
Type of the product
Conditions of entry and exit
Types Of Market Structure
1.Pure (perfect) Competition
2.Monopoly
3.Monopolistic Competition
4.Oligopoly
Monopoly
Number and size: only one provider of a product or service (firm and industry are synonymous)
Type of the product: unique product: no close substitutes
Conditions of entry and exit: Entry or exit is blocked. Monopolies also need barriers to entry to protect
them from new firms entering the market. Barriers to entry can include brand loyalty through
advertising and economies of scale.
Control of Price: is the price maker
Disadvantage to Monopoly
Group 6 Market Structure
Edra, CZheimer
Barcelo, Crystal
Sibulan, Jovelyn
La Morena, Clarisse
Legazpi, Audrey
MARKET STRUCTURE
1. Higher Prices
Advantages of Monopoly
1. If there are significant economies of scale, a monopoly can benefit from lower average costs. This can
lead to lower prices for consumers.
2. Monopolies make supernormal profit which can be invested in Research & Development. This is
important for industries like medical drugs.
Monopolistic Competition - a market structure which combines elements of monopoly and competitive
markets.
Number and size: many firms
Type of the product: Produce differentiated products.
Conditions of entry and exit: Freedom of entry and exit
Control of Price: little price making power
Disadvantages of Monopolistic Structure
1. due to differentiated products chances are companies may charge more than fair price from the
consumers for extra features in product
2. in order to differentiate their products from other companies add irrelevant features
3. In monopolistic competition companies spend too much money on advertising increased cost to
consumer in the form of higher price for the product.
Advantages of Monopolistic Structure
1. In case of monopolistic competition buyers get plenty of options due to differentiated products
2. They tend to advertise about it through various channels of communication which helps the customers in
making informed decision by comparing the features of various products.
3. It helps in innovation because the only thing which will help the company in surviving in case of
monopolistic competition is to constantly add new features to product
MARKET STRUCTURE
Duopoly, a special case of an oligopoly with two firms.
Oligopsony, a market where many sellers can be present but meet only a few buyers.
Number and size: a small number of firms
Type of the product: Differentiated products, advertising is often important
Conditions of entry and exit: Barriers (huge capital investment may be the barriers to enter) to entry, but
less than monopoly.
Control of Price: how other firms set price and output
Disadvantages of Oligopoly
2. Limited Choices
Advantages of Oligopoly
1. High Profits
2. Simple Choices
3.Competitive Prices
Group 6 Market Structure
Edra, CZheimer
Barcelo, Crystal
Sibulan, Jovelyn
La Morena, Clarisse
Legazpi, Audrey
MARKET STRUCTURE
Sources:
http://www.yourarticlelibrary.com/economics/market/market-structure-meaning-characteristics-and-forms-
economics/28736/
http://www.economicshelp.org/microessays/markets/
http://www.slideshare.net/mithileshtrivedi581/market-structure-and-types-of-market-strucyure
http://www.economicshelp.org/microessays/markets/perfect-competition/
http://www.economicshelp.org/microessays/markets/monopoly-diagram/
http://www.economicshelp.org/blog/311/markets/monopolistic-competition/
http://www.economicshelp.org/microessays/markets/oligopoly/
https://economicsassist.wordpress.com/2013/06/03/advantages-and-disadvantages-of-perfect-competition/
http://www.letslearnfinance.com/advantages-and-disadvantages-of-monopolistic-competition.html
http://thenextgalaxy.com/the-advantages-and-disadvantages-of-ogligopoly/