1. Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly
Market Structures
Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly

2. Market Structures
A market structure is an economic model that allows economists to examine competition among businesses in the same industry.

3. Regulation and Deregulation
Regulation is a set of rules or laws designed to control business behavior
Antitrust legislation- defines monopolies and gives government the power to control them.
Deregulation reduces or removes government control of business.

4. Barrier to Entry
Barriers to entry make it hard for a new business to enter a market.
Examples: Large size government regulations, or special resources, or technology

5. *Perfect Competition
The ideal model of a market economy; however, real markets are never perfect.
Price takers- a business that cannot set the prices for its products, but instead, accepts the market price set by the interaction of supply and demand.

6. Perfect Competition Characteristics
Numerous Buyers/Sellers- A large number of buyers and sellers ensures that no one controls prices.
Well-Informed Buyers/Sellers- Both buyers and sellers know the market prices and other conditions.
Independent Buyers/Sellers- Buyers and sellers do not band together to influence prices.
Standardized Products- All products are essentially the same
Freedom to Enter/Exit Markets- Producers can enter or exit market with no interference.

7. Monopoly
A market structure in which only one seller sells a product for which there are no close substitutes.
Pure monopolies are as rare as perfect competition but a few businesses come close.

8. Monopoly Characteristics
Only One Seller- A single business controls the supply of a product that has no close substitutes.
Control of Prices- Monopolies act as price makers because they sell products that have no close substitutes and they face no competition.
Restricted, Regulated Market- Government regulations or other barriers to entry keep other firms out of the market.

9. Monopoly Crash Course
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10. Types of Monopolies
Natural Monopoly- occurs when the cost of production is lowest with only one producer (Water Company)
Government Monopoly- When the government either owns and runs the business or authorizes only one producer. (Postal Service)
Technological Monopoly- When a firm controls a manufacturing method, invention, or type of technology. (Patents)
Geographic Monopoly- When there are no other producers within a certain region. (Gas stations in small cities)

11. Monopolistic Competition
Occurs when many sellers offer similar, but differentiated, products.
Many sellers and many buyers
Limited control of prices
Freedom to enter or exit market
Example: Hamburger Restaurants

12. Most common in industries where differentiation is possible.
Monopolistic Competition- cmarket.asp
Examples?

13. Oligopoly
A market structure in which only a few sellers offer a similar product.
Few sellers and many buyers
Standardized or differentiated products
More control of prices
Little freedom to enter or exit markets

14. http://www. investopedia
4/what-are-some-current-examples-oligopolies.asp
Examples?

15. Nonprice competition
Occurs when producers use factors other than low prices to try to convince customers to buy their product.
Examples?

16. Market Structure Activity
With a partner or individually, create a colorful cartoon involving a specific market structure. (perfect competition, monopoly, monopolistic competition, or oligopoly)
Your cartoon should illustrate a specific characteristic(s) of a market structure.
Provide text that explains your illustration.
Neatness matters

17. Market Structure Activity
Choose a market structure that is close to perfect competition. Describe how the five characteristics of perfect competition apply to that market. Then, illustrate how that market would be different under each of the other three market structures. Give specific examples of how the market would change.