1. (Free) Market Structures The number of companies producing identical products

2. Number of Producers Complete the spectrum as you go!

3.  Many producers  Identical products › Competition for the same buyers  No barriers to entry into the market › Sellers enter and exit freely  No advantage for existing firms › Again, identical products  Good price information › For buyers and sellers (well informed) 1) Perfect Competition

4.  Many different airlines  Roughly identical products  Some barriers › Start up costs › Access to airport terminals › Route congestion  Travel sites › Reliable information about prices from a variety of sources Example - Airlines

6.  One player (one competitor)  One product  Complete barrier to entry into the market  Ultimate advantage for existing firms › Own > 75% of market share  Only one price coming from one player  Few actually exist today 2) Monopoly

7. Anti-trust laws  A company without competition is harmful to the country.  The US gov’t has laws that allow them to break up monopolies to try to promote more competition.  Examples: Standard Oil controlled the market for oil and gasoline… Federal GOVT forced it to break into 33 smaller companies in 1911.

8.  Only competitive company in Denver  Gas and electric (Natural Monopoly)  Minimal competitors exist › Solar › Wind  Xcel sets price!  Can you think of any other types/kinds of monopolies? Example – Xcel Energy

9. Technological Monopoly

10. Technological Monopoly – contd. › Copyright: lifetime + 50 years! This telecast is copyrighted by the NFL for the private use of our audience. Any other use of this telecast or of any pictures, descriptions, or accounts of the game without the NFL ’ s consent, is prohibited.

11. Government Monopoly › Government owned businesses!

13.  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 3) Oligopolies (Few Sellers)

14.  Few sellers of TV service  Not much difference in products  Some barrier to entry into market  Cable seems to have some historical advantage  Competition is fierce! Example – Comcast and DirectTV

21. Free Market Structures The number of companies producing identical products