1. What are the market structures a firm competes in?

2. Describe the key characteristics of each market structure.

3. Give at least 1 example of a firm or industry for each market structure.

4. What does it mean to be a "price-taker"?

5. What does it mean to have "market power"?

1. There are four market structures they are perfect competition, monopolistic competition, monopoly and oligopoly market.

2. In perfect competition there are numerous firms producing identical goods and they cannot influence the market price as they do not have the market power. Monopolistic market structures also have many firms producing similar products but they are slightly differentiated products. They can influence the prices to certain extent.

In monopoly market there is only one producer of the good and he has market power and the price control. There is no substitute for this product. Oligopoly market has two or more sellers of similar products they collectively take up the market prices and influence the market.

3. Perfect competition Eg consumer goods like soaps, monopolistic competition Eg Froot loops and Apple jacks, monopoly Eg Monsanto corn harvesting company and oligopoly market Eg Microsoft and sony in gaming industry.

4. Price taker means firm accepting the price that is already in the market and does not have ample market share to influence the prices of the products in the market.

5. Market power is the company's ability to hold premium level prices and manipulate the prices and supply of the product in the market.