Market structure

Question 1

Perfect competiton

Answer 1

• All businesses offer same product
• Intense competition
• Competitors have to agree on the same price

Question 2

Oligopoly

Answer 2

• A small number of firms with a large market share
• Usually compete on non-price factors such as branding and USP
• E.g. retail banking, grocery retailing

Question 2

Monopolistic competition

Answer 2

• Many small firms offering differentiated products
• Each firm has a small market share
• E.g. restraunts, local services

Question 3

Monopoly

Answer 3

• One supplier within the market
• Control over price and output
• Regulated to protect customers

Question 4

Competiton policy

Answer 4

• Monopoly exsists where there is only one firm within a market.
• Government refers to a firm who has a market share of 25% of having monoply powers
• Monopolies can exploit customers through high prices
• So are regulated to protect customers