1. Characteristics of Market Structures

2. Types of Market Structures:
Pure (Perfect) Competition
Monopolistic Competition
Oligopoly
Monopoly

3. Pure (Perfect) Competition
Number of Sellers: Many/Unlimited
Barriers to Entry: Low or No Barriers to entry
Price Control: None – price taker – must take the market price
Product Differentiation: None – Products are identical

4. Monopolistic Competition
Number of Sellers: Many
Barriers to Entry: Low Barriers to entry
Price Control: Some
Product Differentiation: Yes – Firms must engage in non- price competition to distinguish their products from those of competitors

5. Oligopoly Number of Sellers: Few Large Firms Control the Market
Barriers to Entry: High
Price control: Yes – Price leadership – when one firm increases or decreases price, the others will follow to maintain market share
Product Differentiation: Varies – Oligopoly markets may sell identical or differentiated products – those with differentiated products will use non-price competition

6. Monopoly Number of Sellers: One Barriers to Entry: High Barriers
Price Control: Strong Control over price (price setters)
Product Differentiation: Not Applicable – there is only one seller