Question

Name the four types of market structures and list their main characteristics.

Answer 1

The four main market structures are perfect competition, monopoly ,monopolistic competition and oligopoly

1 A perfect competition is a market structure type in which there are-

large number of buyers and sellers in the market

the price is decided only by the market forces that is demand and supply

there are no barriers to entry and exit

they sell homogenius products

2 if we talk about a monopoly then in this -

there is single seller and large number of buyers in the market

the price is decided only by the single seller

so it is also called price maker

there are very high barriers to entry and exit in the market

3 If we talk about monopolistic competition then it is a market structure type in which-

there are large number of buyers and sellers in the market

the products are slightly differentiated them in terms of shape, size, colour

there are low barriers to entry and exit

4 if we talk about oligopolistic market then in this -

there are few large sellers in large number of buyers in the market

the price is decide only by these few sellers

there are high barriers to entry and exit in the market

they form cartels to have price in market control