The Economic Market Structures of a Monopoly and Pure Competition

Paper Summary:

This paper discusses and differentiates the four primary economic market structures of perfect competition, monopolistic competition, oligopoly and monopoly, suggesting examples of each. It also addresses how firms in each of the market structures respond to these factors.

From the Paper:

"Market structure is the particular environment of a firm, the characteristics of which influences the firm's pricing and output decisions (Arnold, 2001, p. 501). There are five features that determine the level of competition in an industry which characterize an industry in a particular market structure. These include: (1) the number of buyers and sellers; (2) the amount of differentiation between the products of different firms in the industry; (3) the ease with which new firms enter or old firms exit the market; (4) the availability of information about prices and availability of products and resources; and (5) the ways in which firms in the industry compete with each other, such as through prices or advertising."

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