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Many producers: All small, price takers.
Identical products.
Easy for new firms to enter the industry.
Many producers: All small, limited price setting power.
Product differentiation.
Relatively easy for new firms to enter the industry.
Customer loyalty.
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.