Chapter 21- market structure

Question 1

What is market structure

Answer 1

Market structure is the condition which exists in the market (including the number of firms)

Question 2

What is a competitive market

Answer 2

A market with a number of firms that compete with one another

The more competitive the market is, the more sellers and buyers there are. With a high number of sellers, each firm will have a small share of the market, accounting for a small amount of the total market supply.

This means that the change in output of one firm has little or no effect on the price.

The existence of multiple firms means that consumers can switch between the products of rival firms.