EconomicsCode 9708
Different market structures
What this topic asks you to be able to do
- two kinds of market structure: perfect competition, and imperfect competition in the form of monopoly, monopolistic competition, oligopoly or natural monopoly
- how the listed markets are set apart by the number of buyers and sellers, the degree of product differentiation, how freely firms may enter the market and how much information is available
- the obstacles to entering and leaving a market, namely legal barriers, market barriers, cost barriers and physical barriers
- the performance of firms across different market structures: their revenues and revenue curves; their output over the short run and over the long run; their profits in the short and long runs; the shutdown price for both the short and long run; how a firm's supply curve is derived under perfect competition; the efficiency and X-inefficiency of firms in the short and long run; contestable markets, covering their features and what they imply; price competition alongside non-price competition; in oligopoly, collusion and the Prisoner's Dilemma, including the pay-off matrix for two players
- the definition of the concentration ratio and how it is calculated