Market structures

Question 1

Learning outcomes

Answer 1

Identify the characteristics of each type of market structure.

Question 2

Factors that effect pricing and the nature of competition.

Answer 2

1. Number of sellers
2. Type of product
3. Barriers to entry
4. Market power

Question 3

Market Structures(Perfect competition)

Answer 3

_Many firms exist, selling an identical an identical

1. Sell an identical product
2. Many buyers
3. No entry restrictions to the industry

Question 4

Market Structures(Monopolistic Competition)

Answer 4

_Many sellers but each has a different product

1.Relatively large number of small firms
2,Free entry
3.Similar but not identical products

Question 5

Market Structures(Oligopoly)

Answer 5

_A Limited number of large firms comprising and industry in which they compete.

1. Competition between a few
2. Interdependence
3. Branding is very important
4. Barriers to entry
5. Initial capital may be prohibitive

Question 6

Market Structures(Monopoly)

Answer 6

_A market in which there is a single seller.

1. No substitutes
2. One single seller
3. Prices are set
4. High barriers to entry

Question 7

Market Structures(Monopsony)

Answer 7

_A market in which there is a single buyer.