1. 4 Types of Market Structures that for Business Competition

2. 1) PURE COMPETITION

3. Conditions for Pure Competition Condition 1: Many buyers and sellers.

4. Conditions for Pure Competition Condition 2: Sellers offer identical products.

5. Conditions for Pure Competition Condition 3: Buyers and sellers are well-informed about items for sale.

6. Conditions for Pure Competition Condition 4: Sellers are free to enter the market.

7. Pure competition relies on Non- Price Competition. This means they don’t rely on price when buying. Instead, they look at things like: 1.Physical characteristics 2.Location 3.Service level 4.Advertising, image, or status

8. 2) Monopolistic Competition vs.

9. Monopolistic Competition Condition 1: Many sellers.

10. Monopolistic Competition Condition 2: Sellers offer different products, but they are similar.

11. Monopolistic Competition Condition 3: Sellers have some control over their prices.

12. Product Differentiation When a business makes a product different from other similar products

13. Product Differentiation

14. 3) Oligopoly A market situation in which a few large sellers of a product dominate.

15. Oligopoly 1.A few sellers in the market dominate = less competition 2.Some variety of goods 3.Some control of price 3 Conditions:

16. 4) Monopoly A market situation with only one seller of a particular product controls the market for that product.

17. Monopoly 1.One seller 2.No variety of products 3.Sellers have total control of their prices 3 Conditions

18. Four types of Monopoly Natural – a situation where costs are minimized by having a single producer

19. Four types of Monopoly Geographic – When an area is too small to support two or more businesses.

20. Four types of Monopoly Technological – When a business discovers or invents something entirely new

21. Four types of Monopoly Government – when a business is owned and operated by the government

22. The business cycle is the recurring ups and downs of the economy.

23. Business Cycle Peak – the best Recession – decrease for six months Trough – the worst Expansion – improving

24. If a recession is very severe it may turn into a depression. The U.S. has experienced only one of these in the 1930’s.

25. The Consumer Price Index (CPI) is used to measure price changes over a period of time to measure the economy.

26. Inflation vs. Deflation Inflation – rise in the general price level. As years go by, prices generally rise. Deflation – decrease in the general price level. Only time this happened was during Great Depression.