Market Structures

1. Market Structures • This is the nature and degree of competition among firms operating in a given industry  • It is useful to understand how people and companies compete • In general, as competition increases, what happens to price? It decreases. 

4. 1. Perfect Competition • This is where many producers sell the same undifferentiated products to the market. The products are said to be homogenous in that the product of one manufacturer cannot be distinguished from that of another producer. Example- wheat • Prices would be lowest in this market structure

6. 2. Monopolistic Competition • This is a market structure in which many companies sell products that are similar but not identical  • Example would be Fast food Industry

7. MONOPOLISTIC COMPETITION Characterised by quite a large no. of firms (though not as many as perfect competition: often coexists with oligopoly in same industry (e.g. financial services Freedom of entry and of exit Each firm produces a product or service that is in some way different to that of its competitors - can be due to location (petrol station) , unique product (small bakery), quality of service (plumber) etc.

9. 3. Oligopoly • An oligopoly is a small group of businesses, two or more, that control the market for a certain product or service. This gives these businesses huge influence over price and other aspects of the market • Examples would be Apple and Samsung with Smart Phones

11. 4. Monopoly • A monopoly is when barriers to entry exist because one firm can operate at a lower marginal cost than its competitors. Once competitors have been stamped out, the monopoly firm can raise prices, restrict output and hurt consumers pockets • Example would be Irish Rail in Ireland