7.6.1—Market structures

Market structure is the pattern of competition in a market, shaped by the number and size of firms, product differentiation, barriers to entry and exit, information and the firms’ control over price.

The textbook structures—perfect competition, monopolistic competition, oligopoly and monopoly—are benchmarks. Real markets often sit between them, so use the features that matter rather than forcing a label.

Many small firms selling an identical commodity face different constraints from a few firms selling differentiated mobile networks, even if both are called “competitive” in casual speech.

The number of firms alone does not determine structure; barriers, product differences and strategic interdependence can be more important.