Comparing Market Structures
Type of Market | Perfect Competition | Monopolistic Competition | Oligopoly | Monopoly |
Number of firms | Very many | Many/ several | Few | One |
Freedom of entry | Unrestricted | Unrestricted | Restricted | Restricted or completely blocked |
Nature of product | Undifferentiated | Differentiated | Undifferentiated or differentiated | Unique |
Implications for demand curve | Horizontal: firm is a price taker | Downward sloping, but relatively elastic | Downward sloping. Relatively inelastic(shape depends on reactions of rivals) | Downward sloping; more inelastic than oligopoly. Firm has considerable control over price. |
Average size of firms | Varies | Small | Small | Large |
Possible consumer demand | Minimal | Mediocre | Large | Large |
Profit making possibility | Minimal | Mediocre | Large | Large |
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