Production- Perfeet Cornpetition Market Structu There are many different types of market structure. The main ones are 1. Perfect Competition: Many small price-taking firms in an industry with free-entry 2. Monopoly: One large price-setting firm in an industry with barriers to entry 3. Duopoly: Two large price-setting firms in an industry with barriers to entry 1. Oligopoly: A small number of large price-setting firms in an industry with barriers to entry 5. Monopolistic Competition: A large number of price-setting firms in an industry with free en The industry of interest dictates appropriate model choice. The models have very different properties. letion-Perfeer Competition Perfect Competition An industry is said to be perfectly competitive if there are a large number of small price-taking firms which can enter and leave the industry at will. In a perfectly competitive market an individual firm has no impact upon prices. The demand curve they face is therefore a straight line at the current market price, p 、 Market demand If the firm charges above p*demand is zero, and if it charges below the firm faces the market demand curve.Production — Perfect Competition 1 Market Structure • There are many different types of market structure. The main ones are: 1. Perfect Competition: Many small price-taking firms in an industry with free-entry. 2. Monopoly: One large price-setting firm in an industry with barriers to entry. 3. Duopoly: Two large price-setting firms in an industry with barriers to entry. 4. Oligopoly: A small number of large price-setting firms in an industry with barriers to entry. 5. Monopolistic Competition: A large number of price-setting firms in an industry with free entry. • The industry of interest dictates appropriate model choice. The models have very different properties. Production — Perfect Competition 2 Perfect Competition • An industry is said to be perfectly competitive if there are a large number of small price-taking firms which can enter and leave the industry at will. • In a perfectly competitive market an individual firm has no impact upon prices. • The demand curve they face is therefore a straight line at the current market price, p ∗ . ................................................................................................................................................................................................................................................................................ ............................................................................................................................................................................................... 0 p y p ∗ Market demand Firm demand . . . . . • If the firm charges above p ∗ demand is zero, and if it charges below the firm faces the market demand curve