Firms and Market Structure

Firms are businesses that produce goods or services, while market structure describes how these firms compete within a particular industry. It considers factors like the number of competitors, the similarity of products, and how easily new firms can enter the market. Common market structures include perfect competition (many firms, identical products), monopolistic competition (many firms, slightly different products), an oligopoly (few large firms dominate), and a monopoly (a single firm controls the market). Understanding market structure helps explain pricing, innovation, and consumer choices within different industries.