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Microsoft Word 2007

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Submitted By mahmudrahman
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MARKET STRUCTURES
MARKET STRUCTURE In economics, market structure (also known as market form) describes the state of a market with respect to competition. MAJOR MARKET FORMS
The major market forms are:
• • • • •

Perfect competition, in which the market consists of a very large number of firms producing a homogeneous product. Monopolistic competition, also called competitive market, where there are a large number of independent firms which have a very small proportion of the market share. Oligopoly, in which a market is dominated by a small number of firms which own more than 40% of the market share. Monopoly, where there is only one provider of a product or service. Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm.

The imperfectly competitive structure is quite identical to the realistic market conditions where some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the market conditions. These somewhat abstract concerns tend to determine some but not all details of a specific concrete market system where buyers and sellers actually meet and commit to trade. The correct sequence of the market stucture from most to least competitive is perfect competition, monopolistic competition, oligopoly, and pure monopoly. The main criteria by which one can distinguish between different market structures are: the number and size of producers and consumers in the market, the type of goods and services being traded, and the degree to which information can flow freely.
Market structure Number of sellers Number of buyers Nature of the commodity Availabili ty of Related goods Price control Buyer seller Degree of competitiv eness Exit/ entry of firms

Perfect competition Monopolistic competition Oligopoly

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