Prepared by:Dr.Hassan Sweillam Market Structure Prepared by:Dr.Hassan Sweillam Market failure

Market structure The Market Structure refers to the characteristics of the market either organizational or competitive, that describes the nature of competition and the pricing policy followed in the market. The term “ market” refers to a place where sellers and buyers meet and facilitate the selling and buying of goods and services. But in economics, it is much wider than just a place, It is a scope of all the buyers and sellers, who are spread out to perform the marketing activities. Market failure

Types of Market structure Four types of market structure : 1- Perfectly competitive markets 2- Monopolistic markets 3- Imperfectly competitive markets 4- Oligopoly markets Market failure

1-Perfectly competitive markets Perfectly competitive markets result in outputs and prices which are socially optimal in the sense of the maximizing surplus. Perfectly competitive markets definition : It is that competition results in output levels for which marginal social benefit equals marginal social cost. (MSB = MSC) Market failure

Perfectly competitive markets a perfectly competitive market is a market where businesses offer an identical product and where entry and exit in and out of the market is easy because there are no barriers. Perfect competition is a theoretical market structure. It is primarily used as a benchmark against which other, real-life market structures are compared. The industry that most closely resembles perfect competition in real life is agriculture Market failure

Perfectly competitive markets Characteristics Perfect competition is a market structure in which the following six criteria are met: 1) All firms sell an identical product; 2) All firms are price takers - they cannot control the market price of their product; 3) All firms have a relatively small market share; Market failure

Perfectly competitive markets Characteristics 4) Buyers have complete information about the product being sold and the prices charged by each firm; 5) The industry is characterized by freedom of entry and exit. Perfect competition is sometimes referred to as "pure competition". One firm cannot control the market or its conditions. In other words, no firm has the power to influence the market and therefore the price received for products is the result of the whole industry. Market failure

Review questions True or False Questions 1- The Market Structure refers to the characteristics of the market either organizational or competitive, that describes the nature of competition and the pricing policy followed in the market. Answer: True 2- There are five types of market structure . Answer: False 3- The industry that most closely resembles perfect competition in real life is agriculture.

Review questions Multiple Choice Questions 1- __________ is a type of market structure showing some but not all features of competitive markets. A- Imperfectly competitive B- Oligopoly C- Monopolistic D- None of these Answer: A

Review questions Multiple Choice Questions 2- __________ is a market structure in which a small number of firms has the large majority of  market share. A- Imperfectly competitive B- Oligopoly C- Monopolistic D- None of these Answer: B

Review questions Multiple Choice Questions 3- __________ is one form of imperfect competition include competition among two companies. A- Oligopoly B- Monopoly C- Duopoly D- None of these Answer: C

Review questions Brief explain Questions 1- Briefly explain the Perfectly competitive markets and its Characteristics? 2- Briefly explain the Monopolistic markets and its Characteristics? 3-Briefly explain the Oligopoly markets Characteristics? Brief explain Questions