Market Structures The number of companies producing identical products

 Many players (competitors)  Identical products (competition for the same buyers)  No barriers to entry into the market  No advantage for existing firms  Good price information (for buyers and sellers) Perfect Competition (Ideal)

 Many different airlines  Roughly identical products  Some barriers (a few million dollars; access to airport terminals, etc.)  Travel sites—you can get reliable information about prices from a variety of sources Example (Airlines)

 One player (or one competitor)  One product  Complete barrier to entry into the market  Ultimate advantage for existing firms  Only one price coming from one player Monopoly (Opposite)

 Few sellers  Not much different in products  Some barrier to entry into the market  Advantage for existing firms  Sellers combine, set prices or compete fiercely against each other Oligopolies (“Few” Sellers)

 Many sellers  Slightly different products, but each seller has a “monopoly” on their product  Some barrier to entry into the market  Advantage for existing firms  Price is similar to other sellers, but price can seem more like a monopoly Monopolistic Competition

Monopolistic competition Oligopoly Perfection competition A large number of firms, each having a small portion of the market share and slightly different products A market is run by a small number of firms that together control the majority of the market Features no barriers to entry, identical products and unlimited number of producers and consumer Types of Market Structure

Comparison Number of Competitors Differentiation of Products Utility company Cable/Internet/TelephoneScrew company Fine restaurants Name brand clothing Computers

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