Answer to Question #226489 in Microeconomics for Montana

Question

Identify and justify the firm's market structure

Answer 1

The following are factors that may help one determine a market structure

1) The number of buyers and sellers in the market.

2) The ability to negotiate in the market.

3) The concentration degree.

4 ) How products are being differentiated in the market.

Firms market structure refers to how different industries are classified and differentiated based on their degree and nature of competition for services and goods.

There exist four popular types of firms market namely;

Perfect competition. this is whereby all forms sell identical products, Market share does not affect price, firm are able to enter the market and exit with no barrier, buyers have perfect knowledge of market and firms are not the ones to determine prices.

Oligopoly market. This is type of market structure whereby market dominated by a few number of suppliers.

For example Netflix, Amazon and Hulu

Monopoly market. It is a a market structure where by there is only one single seller, selling a unique product in the market. In a monopoly market, the firm (seller) faces no competition.

For there is no other firm producing similar product or close substitute. For example Microsoft company.

Monopolistic competition. This is kind of market structure whereby a market has many firms selling products that are similar but not identical. For example. Nike, Addidas and Puma