Question

Please provide a description of the market structure, identifying its four main categories of firms (3/4th of a page long).

Answer 1

Type	Perfect Competition	Monopolistic Competition	Oligopoly	Monopoly
Number of firms	Very Large	Large	Few	One
Type of product	Homogenous or Similar	Differentiated with close substitutes available	Homogenous or Differentiated depending on the type of oligopoly.	Unique with no close substitutes available.
Demand Curve	Horizontal	Downward Sloping	Downward Sloping	Downward Sloping
Entry-Exit Barrier	Free entry exit	Free entry exit	Barriers exist depending upon the type of oligopoly	Strong entry exit barriers.
Profit	Zero in long run	Zero in long run	High in long and short run	Very high in long run as well as short run
Efficiency	In the long run, production is at the minimum average cost point which is same as the minimum efficient point.	In the long run, production is at the downward portion of aveorage cost point which is nt the minimum efficient point.	Cannot be efficient	Cannot be efficient
Consumer Gain	Maximum as output is very high and price is very low.	Price is high but there are a variety of products	Price is high.	Minimum as output is very less and price is very high.