Market Structure and Competition

Market structure refers to the organization of a market based on the number of firms, product differentiation, and barriers to entry. It influences how companies compete and set prices. Major types of market structures include perfect competition (many firms, identical products), monopolistic competition (many firms, differentiated products), oligopoly (few firms, interdependent pricing), and monopoly (one firm dominates). Understanding these structures helps analyze business behavior, pricing strategies, and consumer choices in various industries, affecting overall economic performance and innovation. Competition varies depending on the market structure, shaping the dynamics of supply, demand, and market efficiency.