Market Structure and Performance

Market structure refers to the way a market is organized based on the number of firms, the nature of products, and the ease of entry and exit. Key structures include perfect competition, monopolistic competition, oligopoly, and monopoly. Market performance examines how well these structures function in terms of pricing, efficiency, and consumer welfare. For example, a monopoly may lead to higher prices and less choice, while perfect competition generally results in lower prices and innovation. Understanding both concepts helps us analyze how businesses operate and impact the economy and consumers.