Market Structures

Vocabulary flashcards covering the four primary market structures: perfect competition, monopolistic competition, oligopoly, and monopoly, including their definitions, price control, barriers to entry, and examples.

Perfect Competition

A market structure characterized by lots of sellers ($1000$ firms), identical products, no control over price, informed buyers and sellers, and low barriers to market entry and exit (e.g., vegetable farming and table salt).

Monopolistic Competition

A market structure that meets all conditions of perfect competition except identical products, featuring many sellers ($100$ firms), similar products with a slight difference, some price control, and low barriers to entry (e.g., designer outlets and fast food restaurants).

Oligopoly

A market structure where a few large sellers ($10$ firms) dominate the industry, set the market price, and have high barriers to entry (e.g., Apple, Samsung, Motorola, American, Delta, United, Southwest).

Price loading

A condition in an oligopoly where when one firm acts, the other firms follow.

Monopoly

A market structure featuring one seller ($1$ firm) of a unique product with no close substitutes, total price control, and high barriers to entry (e.g., Standard Oil, PG&E, and EpiPen).

Price makers

A term referring to a monopoly due to its total control over product price.