Topic 5 Market Structure - South Dade Senior High School
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Transcript Topic 5 Market Structure - South Dade Senior High School
TOPIC 5 MARKET STRUCTURE
Mr. Kallusingh
MARKET STRUCTURE
The type of competition between firms/
businesses competing in the same industry
The types of structures are usually grouped by
perfect competition, monopolistic competition,
monopoly, and oligopoly
PERFECT COMPETITION
Is characterized by a large number of well informed
buyers and sellers with identical products
Five Conditions
1- there are a lot of sellers and buyers
2- the products are the same like salt
3- buyers and sellers act independently
4- buyers and sellers are well informed on market price
5- buyers and sellers can move freely throughout the
business
MONOPOLISTIC COMPETITION
Has all the conditions of a perfect competition
except the products are a little different
Product Differentiation- real or imagined
differences in products in the same industry
Nonprice Competition- use of advertising,
giveaways, or other promotions to sway buyers
MONOPOLY
Opposite of perfect competition, only one seller
of a particular product
Best examples would be telephone company,
cable provider, or electric company
Natural Monopoly- better to have one company
to keep cost down like electric company
OLIGOPOLY
Market Structure in which a few large sellers
dominate the industry
If one of the firms makes a change in price the
others usually follow
Firms working together to do price-fixing is
collusion and is illegal
Since price is similar the companies usually
use Nonprice competition to gain business
REGULATION
The government regulates natural monopolies
to ensure fair pricing, the companies must
submit and gain approval for price change
Government can regulate business by changing
taxes to increase or decrease production
Government has to control waste of companies
so that the environment is not destroyed
DEREGULATION
Is the act or process of removing or reducing
state regulations
Can be done to try and help promote increased
productivity