ABSTRACT
This chapter explains the fundamental characteristics of each market structure and gives concrete examples of how they work. It examines the key characteristics of each of the four market structures—perfect competition, monopolistic competition, oligopoly, and monopoly—and describes how those key characteristics explain the dynamics of each market structure. The chapter aims to compare and contrast the four different market structures using the eight key market characteristics described. It identifies the most likely market structure for a particular industry based on its characteristics. The chapter analyzes the impact of competition and concentration on industries and consumers. Economists have identified four major market structures in capitalist economic systems, ranging from the most competitive to the least competitive: perfect competition, monopolistic competition, oligopoly, and monopoly. One classic example of how oligopolistic companies work to dominate markets is Coca-Cola and its efforts to control shelf space and displays at grocery stores, sometimes in tacit collusion with Pepsi.
