Different types of Market structure: 1. Perfect Competition – many firms, freedom of entry, homogeneous product, normal profit. 2. Monopoly – One firm dominates the market, barriers to entry, possibly supernormal profit. 3. Oligopoly – An industry dominated by a few firms, e.g. 5 firm concentration ratio of > 50% 4. Monopolistic Competition – Freedom of entry and exit, but firms have differentiated products. Likelihood of normal profits in the long term. 5. Contestable Markets – An industry with freedom of entry and exit, low sunk costs. The theory of contestability suggests the number of firms is not so important, but the threat of competition.
Posted on: Sun, 07 Dec 2014 09:26:00 +0000
Trending Topics
Recently Viewed Topics
© 2015