Briefly explain different market structures
1. Perfect competition: In a perfectly competitive market, there are many buyers and sellers, homogeneous products, easy entry and exit, and perfect information. Prices are set by market forces and no single firm has the power to influence prices.
2. Monopoly: A monopoly exists when a single firm dominates the market with no close substitutes. They have significant control over prices and output, leading to higher prices for consumers and decreased competition.
3. Oligopoly: An oligopoly is a market structure where a small number of large firms dominate the market. These firms often engage in strategic behavior to control prices and market share, leading to competition but also potential collusion.
4. Monopolistic competition: In monopolistic competition, there are many sellers offering differentiated products to consumers. Firms have some control over prices based on product differentiation, leading to competition but also some market power.
5. Duopoly: A duopoly is a market structure with only two firms dominating the market. These firms can engage in strategic behavior to maximize profits, leading to a high level of competition but also potential collusion.