1. Market Structures
SSEMI4 The student will explain the organization and role of business and analyze the four types of market structures in the U.S. economy.
c. Identify the basic characteristics of monopoly, oligopoly, monopolistic competition, and pure competition.

2. Key Terms Number of Sellers
Are there many, few, or one seller(s) of the product?
Price Setting Power
Can individual firms control pricing?
Product Differentiation
Difference in products sold by producers?
Non-Price Competition
Use other methods (than price) to attract customers?

3. More Key Terms Barriers to Entry: Obstacles to prevent entrance?
Long-run Profits:
Ability to make economic & accounting profits
Economic Profits:
Money after explicit and implicit costs
Explicit Costs
Out of pocket expenses
Implicit Costs
Opportunity Costs expenses
Accounting Profits:
Money left over after explicit costs

4. Pure (Perfect) Competition:
# of sellers = many
Price setting power = none
Product differentiation = none, product is identical

5. Pure (Perfect) Competition:
Non-price competition =
None
Barriers =
None, easy to enter/exit
Long Run Profits =
None, Goal = short-run profits
leave when profits disappear

6. Monopolistic Competition:
Large # buyers/sellers of similar product
differentiated by brand, quality, etc.
Example: restaurants and retail clothing sellers
# of sellers = many
Price Setting Power = a little bit

7. Monopolistic Competition:
Product Differentiation = Yes; must differentiate to attract consumers
Non-Price Competition = Yes; uses lots of advertising
Barriers = None; easy to enter/exit market
Long-Run Profits =
None; goal =short-run profits
leave when the profits disappear

8. Oligopoly few sellers of a product dominate the market.
Example: Airlines, natural gas
# of sellers = few
Price setting power = price leader-ship = one ↨ price = others follow
Product differentiation = Yes or No; identical or differentiated

9. Oligopoly Non-Price Competition = advertising to attract customers
Barriers =
Yes, firms = very large
produce units at low costs/unit
difficult for small firms to compete
Long-Run Profits= Yes

10. Monopoly one seller of product dominating market.
Example: electrical companies and cable companies
# of sellers = One
Price setting power =
A lot, Price seeker/maker
Product differentiation = No; only one firm

11. Monopoly Non-Price Competition =
Public relations so consumers feel good
Barriers =
Yes = licenses / patents bar entry
ownership of factors of production
Long-Run Profits= Yes