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Market Structures

In this article, we will explain the market structure based on the number of suppliers and buyers for goods and services. You will learn about the different types of market structures, the important features of each structure, and the differences between them. 

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Contents
Table of contents

    Flashcards inMarket Structures 226

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    What is a firm’s main objective?

    Profit maximisation.

    Who are the customers of a firm?


    Individual customers, businesses, or governments.

    What are the financial goals of a firm?


    Profit maximisation, market share expansion.

    What is a firm's profit?


    The difference between the total costs and revenues.

    How to maximise a firm’s profit?


     Profit is maximised when marginal costs equal marginal revenues.

    What are some non-financial objectives of a firm?


    Customer satisfaction, job satisfaction, corporate social responsibility.
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    Frequently Asked Questions about Market Structures

    What is market structure?

    Market structure defines the set of characteristics that help us categorise firms depending on certain features of the market.

    How to classify market structures.

    Market structures can be classified on the basis of the following:

    1. Number of buyers and sellers

    2. Level of entry and exit

    3. Level of information

    4. Nature of product

    5. Price level

    How does a market structure affect the prices?

    The number of buyers and sellers which is the basis of market structure influences the price. The higher the number of buyers and sellers, the lower the price. The more monopoly power, the higher the price. 

    What is the market structure in business?

    The market structure in business can be any of the four major types depending on the level of competition, the number of buyers and sellers, the nature of the product, and the level of entry and exit.

    What are the four types of market structures?

    The four types of market structures are:

    1. Perfect competition

    2. Monopolistic competition

    3. Oligopoly

    4. Monopoly

    Test your knowledge with multiple choice flashcards

    Market factors that influence monopoly power include:

    What are the three main conclusions gathered from the kinked demand curve?

    What are the characteristics of an oligopolistic market?

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