A Market Structure is the number of firms producing identical products which are the same in almost every way except for name.
-*-There are different examples of the different types of market structure based on the special characteristics’ possessed by each type of market structure. Everything is completely dependent on what is being sold in the market at the time.
Monopolistic Competition is a type of imperfect competition in which that many producers sell products that are differentiated from one another by subtle differences such as taste, way of use, and other factors that are dependent on the manufacturer.
- every firm makes independent decisions about price and output, based on its product, its market, and its costs of production
- knowledge is widely spread throughout people involved but will very rarely be perfect
- entrepreneurs have a much more significant role in these because a higher risk/reward system of decision making
- there are rarely any major barriers to entry
Examples: restaurants, general retailing, consumer services
An Oligopoly is a form of monopoly in which a state of limited competition, in which a market is shared by a small number of producers or sellers that dominate the marketplace.
- typically composed of several large firms
- the firms sell either identical products under different names or completely different products altogether
- they have steep barriers to enter
Examples: Steel industry, Film, Television, Cell phones, and Gas