The analysis of market structures is of great importance when studying microeconomics. How the market will behave, depending on the number of buyers or sellers, its dimensions, the existence of entry and exit barriers, etc. will determine how an equilibrium is reached. Even though market structures were thoroughly analysed by economists from the early 20th century on, its study can be traced back to economists such as Antoine Cournot, Alfred Marshall or even Adam Smith.
In this Learning Path we’ll learn about the main market structures, which we’ll analyse more in depth in future LPs. This is what we’ll be learning about:
Market structure, a basic definition;
Perfect competition, a perfect but theoretical market structure;
Imperfect competition, which can take different forms, such as:
Monopolies, when there is only one seller;
Oligopolies, with a few sellers which have price-setting power;
Duopolies, with only two sellers, it makes it easy to study oligopolies;
Monopolistic competition, when many sellers have monopolistics power over small share s of the market;
Buyer’s price setting powers:
Monopsony, when there is only one buyer;
Oligopsonies, with few buyers with great negotiating powers.