Market structure & business ownership:



Perfect competition:

Many producers: All small, price takers.

Identical products.

Easy for new firms to enter the industry.



Monopolistic competition:

Many producers: All small, limited price setting power.

Product differentiation.

Relatively easy for new firms to enter the industry.

Customer loyalty.



Oligopoly:

Two types: Homogeneous & differentiated.

Few firms: 4 or fewer firms produce 50% or more sales:

Economy of scale.

Barriers to entry (patents, advertising, consumer loyalty).

Interdependent pricing: 'live & let live':

Price stickiness.

Price seekers (e.g. Price leadership).

Collusion (price fixing, bid rigging, etc.)

Non-price competition (ads, new brands, packaging).

Predatory pricing.

Urge to merge.