An Introduction To Competitive & Monopoly Markets
- Each firm operates in a specific market
- The conditions in different markets can vary significantly & are determined by the market structure in which the firm operates
- There are a range of market structures, however your syllabus only requires you to know the characteristics of two - competitive markets & monopolies
- Competitive markets are those with an extremely high degree of competition
- A monopoly is a market structure in which one firm dominates the market & has significant market power
The six characteristics which determine the type of market structure a firm operates in - competitive or monopoly
- The answers to the questions above determine the type of market structure in which a firm is operating in
- If a firm is selling a unique product (e.g.hand made car) it is likely operating in a monopoly market & setting high prices