Types of market structures:

1. Perfect Competition:

   • Many small firms
   • Homogeneous products
   • No barriers to entry
   • Perfect information

2. Monopolistic Competition:

   • Many firms
   • Differentiated products
   • Low barriers to entry
   • Some control over pricing

3. Oligopoly:

   • Few large firms
   • Similar or differentiated products
   • High barriers to entry
   • Interdependent decision-making

4. Monopoly:

   • Single firm
   • Unique product
   • High barriers to entry
   • Price setter

5. Monopsony:

   • Single buyer
   • Many sellers
   • Buyer has significant market power

Each structure influences pricing, output, and market efficiency differently.

Differences between perfect competition and monopolistic competition:

1. Product Differentiation:

   • Perfect Competition: Homogeneous products
   • Monopolistic Competition: Differentiated products

2. Number of Firms:

   • Perfect Competition: Very large number of small firms
   • Monopolistic Competition: Large number of small to medium-sized firms

3. Price Control:

   • Perfect Competition: Firms are price takers
   • Monopolistic Competition: Firms have some control over price

4. Barriers to Entry:

   • Perfect Competition: No barriers to entry or exit
   • Monopolistic Competition: Low barriers to entry and exit

5. Long-run Profits:

   • Perfect Competition: Zero economic profit in long run
   • Monopolistic Competition: Possibility of economic profit in short run, tends to zero in long run

6. Information:

   • Perfect Competition: Perfect information
   • Monopolistic Competition: Imperfect information

Characteristics of an oligopoly:

1. Few Dominant Firms: Market dominated by a small number of large firms
2. High Barriers to Entry: Significant obstacles for new competitors to enter the market
3. Interdependence: Firms' decisions significantly affect and are affected by competitors' actions
4. Product Differentiation: Can have either homogeneous or differentiated products
5. Non-Price Competition: Heavy emphasis on advertising, brand identity, and product quality
6. Price Rigidity: Prices tend to be stable due to the risk of price wars
7. Game Theory Application: Strategic decision-making considering competitors' potential reactions
8. Economies of Scale: Large firms can often produce at lower average costs
9. Potential for Collusion: Possibility of formal or informal agreements between firms
10. Market Power: Firms have some control over price, but less than a monopoly