Market Structure

Question 1

What is Market structure?

Answer 1

is a type of competition that exist in an industry

Question 2

Types of Market Structure

Answer 2

Perfect competition
Monopoly
Monopolistic competition
Oligopoly

Question 3

What are the Characteristics/Features of a Perfect Competition?

Answer 3

~ Many sellers
~Many buyers
~ Normal profit
~Freedom of entry and exit
~Fixed price
~ Perfect information and knowledge
~Price takers

Question 4

What are Characteristics/Features of Monopoly?

Answer 4

~One firm dominates the market
~There are barriers to entry
~ Abnormal/Supernormal profit

Question 5

What are the problems that deals with Monopoly?

Answer 5

~Higher prices(the firm can set a higher price than the competitive)
~Supernormal profit(an unequal distribution of income in the society)
~Lack of choice(consumer face lack of choice in the market)
~Productive inefficiency(the output production does not occurs at the lowest point on the Average Cost)

Question 6

What are some characteristics/features of Monopolistic competition?

Answer 6

~Many firms
~Freedom of entry and exit
~Frims produce different products
~Firms make normal profit in long but make supernormal profit in the short run

Question 7

List Four characteristics/features of an Oligopoly?

Answer 7

~ Dominated by a few large firms
~Barriers to entry and exit
~Interdependence of firms
~Differentiated products

Question 8

What is Monopoly?

Answer 8

Is a company that has many buyers and one seller with a downward sloping demand curve

Question 9

What is Perfect Competition ?

Answer 9

A company that has many buyers and many sellers with a perfect elastic demand curve

Question 10

What is Monopolistic Competition?

Answer 10

Is a company that has many buyers and Many sellers with a elastic demand curve

Question 11

What is Oligopoly?

Answer 11

When a company has many buyers and a few sellers with kinked downward sloping demand curve