Group 2 - Sy

VARIOUS MARKET
STRUCTURES
GROUP 2 HENRY SY
THE TEAM
ABAQUITA, Kaye GLORIA, Aldren AZARCON, Danielle

COJETA, Nicole
ESCALANTE, Kirsten GONZALES, Zerrah MADELO, Anne 2

What is
Market Structure?
• it is a starting point for assessing
economic environments of firms
• characterize an economy; such market
structures essentially refer to the degree of
competition in a market.
• recognizes how businesses and markets
operate enables business professionals
and leaders to make knowledgeable
decisions about industry and market news
3
The Market Structures and Characteristics
• Each market structure has its own characteristics which determine the relations
between the sellers to another, of sellers to buyers, company to investors,
economists to government which affect the behavior and interaction of buyers
and sellers.
• The determinants of market structures such as the nature of the goods and
products, the number of sellers, number of consumers, the nature of the product
or service, economies of scale and etc.
• help us understand the principles behind the classification of market structures.
4
Types of Market Structures in any Economy
Perfect/Pure Competition
- are highly competitive markets in which many sellers are competing to sell their
product.
- Firms cannot influence the market price because the individual firm’s
production
- Market demand and market supply determine the market price and quantity.
- The demand for a firm’s product is perfectly elastic
In perfect competition, the firm’s marginal revenue equals the market price.
If MR = MC, economic profit is maximized.
5
Example Perfect/Pure Competition

• Agricultural products such as corn, wheat, soybeans, strawberries, the stock market,
and foriegn exchange market
6
Pure Monopoly
• there is only one seller, so a single firm will control the entire market
• It can set any price it wishes since it has all the market power
• there are barriers to entry of the market to prevent competition
• there are four(4) types of monopolies: natural, geographic, technological and government
monopoly
A monopoly maximizes profit by producing output when MR = MC and by charging
maximum price that consumers are willing to pay for that output.
7
Example of Monopoly
• Utility Companies, such as electricity and water.

- For water, it makes sense to have just one company providing a network of water pipes
and sewers because there is a very high capital costs involved in setting up a national
network of pipes and sewage systems.
8
Example of Monopoly
• Windows 7
- it was patented so no one else can take the creation. The legal protection makes the
business a monopoly
9
Monopolistic Competition
- a market structure referring to a large number of small firms competing
against each other
- is a type of imperfect competition such that there are many producers
competing against each other, but selling products that are differentiated
from one another and hence are not perfect substitutes
Profit is maximized by producing output when MC = MR
10
Example Monopolistic Competition

not intended for substitution for they have their own identity
11
Oligopoly
• Few very large sellers dominate the industry and compete with one another
• When one firm acts, the others tend to follow
• Firms are “price-makers” - firms in this case either compete with another to collaborate
together
They use their market influence to set the prices and in turn maximize their profits. So the
consumers become the price takers. However, if prices are too high, buyers will head to
product substitutes in the market.
12
Example of Oligopoly
• The sellers in an oligopolistic market will base their behavior on what the other
sellers do
13
Example of Oligopoly
• Cable television
• Airlines
• Pharmaceuticals
• Cellphone services
• Oil and Gas
• Auto Industry
• Mass Media
14
What Market Structure
is the Philippines?
• belongs to an oligopolistic market
• Price discrimination – charging different
prices to different buyers
15
THANK YOU!

Group 2 - Sy

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VARIOUS MARKET

ABAQUITA, Kaye GLORIA, Aldren AZARCON, Danielle

ESCALANTE, Kirsten GONZALES, Zerrah MADELO, Anne 2

Example Perfect/Pure Competition

• Utility Companies, such as electricity and water.

Profit is maximized by producing output when MC = MR

Example Monopolistic Competition

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