ABSTRACT
This chapter introduces the reader to the concept of market structures. It covers the more theoretical economic models of a competitive market and also those of a more monopolistic market. The competitive market model covers the conditions necessary for a competitive market and the overall determination of price within such a market – to include the price faced by an individual competitor or firm. The chapter outlines the long-term equilibrium solution within such a market. It discusses the monopolistic market in a similar fashion to include the price output decision for the monopoly firm. The chapter addresses some of the reasons that a monopoly might arise and some of the factors that might act to reduce monopoly power. It contains a discussion of the market structure of the various parts of the aviation industry and how they may approximate monopolistic conditions under certain circumstances.
