Market Structure Summary Sheet

<-- --------Characteristics -------- --> <-- --------Performance -------- -->

Efficiency? Economic Profit

Market Type # of Mkt Product Barriers Gov. Productive Allocative Short Long Example
sellers Conct. Differentiation to Reg. of Run? Run?
Ratio entry? Price?

Perfect Dozens 0% None, the firm None, Yes Yes, No, firms Agriculture
Easy to Yes
Competition to sells an firm is a only don't earn comes
enter
hundreds, identical "price in economic close
too many product, no taker" short- profits.
for advertising run
anyone to
influence
price

Monopolistic Many Yes, although Very low No No No Yes No, profits Local retail
<40%
Competition small products are barriers, will be fast food,
similar
sellers easy "competed gasoline,
entry/exit away" by hair stylists,
new firms etc.

Undifferentiated Few >60% No High No govt. No No Yes Yes Steel,

Oligopoly sellers barriers price contract
regulation construction

Differentiated Few Firms have High No No, price No Yes Yes Beer, soft
>60%
Oligopoly sellers some barriers not at min. drinks,
differentiation of ATC vehicles,
in their
products
 etc.

Natural Only one 100% No close Barred Yes, Possible Possible, No No Local
Monopoly seller substitutes state/local depends electric
Company govt. on how power
regulates price is
price regulated

Pure Monopoly Only one 100% No close Barred None, but No No Yes Yes Alcoa
seller substitutes firm has (historic)
some many firms
pricing in small,
freedom local mkts.

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