Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. This mind map introduces Market Structure.

Market Structure - Mind Map

Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.

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Market Structure

• Perfect Competition
  
  • Large number of firms
  • Price takers
  • Homogenous products
  • Perfect information
  • Freedom of entry and exit
  • No external costs or benefits
  • P = AR = MR
  • Long run - normal profit
  • Long run - costs minimised
  • P = MC
  • Long run output at maximum efficiency
• Monopoly
  
  • Market dominated by one firm
  • Natural monopolies - utilities
  • High barriers to entry
  • Pricing strategies to prevent competition
  • Abnormal profit in short and long run
  • Welfare losses
  • Possible benefits of monopolies
    
    • R&D
    • Innovation
  • Potential to be regulated
  • Sources of monopoly power
    
    • Dominant market share
    • Ownership of resources
    • Legal
    • Patents
    • Ability to erect barriers to entry
• Duopoly
  
  • Market dominated by 2 firms
  • Possibility of collusion
  • Highly interdependent
  • High barriers to entry
  • Price leadership
• Oligopoly
  
  • Competition amongst the few
  • High Concentration ratio
  • High degree of interdependence
  • Stable or rigid prices?
  • Non-price competition
  • Homogenous or highly differentiated goods
  • Saucer shaped AC curve
  • Possibility for collusion
  • Barriers to entry
• Monopolistic or imperfect competition
  
  • Large number of firms
  • Product differentiation
  • Relative freedom of entry and exit
  • Imperfect knowledge
  • D = downward sloping
  • P > MC - Allocative inefficiency
  • Long run equilibrium - not technically efficient
  • Long run equilibrium - normal profit
  • Firms have some control over price