Lesson Materials and Activity Sheets in Applied Economics - Week 6

APPLIED ECONOMICS
WEEK 6
MELC: Differentiate various market structures in terms of number of
sellers, types of products, entry/exit to market, pricing power, others.
MARKET STRUCTURES
The competitive environment in which a firm produces and sells its products and/or offer
its services has certain characteristics. These characteristics influence the behaviors and
actions of firms working in the market.
Characteristics of a Market
1. Number of firms in the market

2. Size of firms in the market
3. Market power and influence over the price
4. Degree of product differentiation
5. Barriers to entry into the market
6. Degree of government intervention
7. Others
The interactions and differences between these aspects allow for the existence of different
market structures.
Figure 1 Different Market Structures
1|P age of Applied Economics – Week 6

Number of Firms operating under each Market Structure
Monopoly is a market structure characterized by a one firm (seller/producer) in the

market, oligopoly has few firms (sellers/producers, up to 15), monopolistic competition has
many but varied while perfect competition is characterized by infinite number of firms
(sellers/producers).
Size of the firms operating under each Market Structure
In monopoly, the size of the sole firm is very large. In oligopoly, the firms
(sellers/producers) are large. In monopolistic competition, the firms are relatively small and in
perfect competition, the firms are small.
Pricing Power of Firms have under each Market Structure
In both monopoly and oligopoly, the firms (sellers/producers) are price setters or the
ones that decide the price. In monopolistic competition, no firm has a total control over the
market price and if there is, its influence over the price is limited. While in perfect competition,
the firms (sellers/producers) are price takers, meaning a firm takes its price from the whole
industry.
Uniqueness/Differentiation/Homogeneousness of Goods/Services under each Market

Structure
In monopoly, the product/service is unique and often has a patent giving the firm
exclusive rights to sell/produce it. In oligopoly and monopolistic competition, the firms’ products
are branded and have fair amount of differentiation. While in perfect competition, the products
are homogeneous and/or identical and brandless.

Ease/Difficulty of the Entry to each Market Structure
In monopoly, other firms (sellers/producers) are blocked or unable to enter the market.
In oligopoly, barriers to entry are high. In monopolistic competition, there are few barriers to
entry. In perfect competition, new entrants are allowed as there is no barrier to entry.
Degree of Government Intervention/Restriction present under each Market Structure
In monopoly, the welfare of the general public dictates that government should take
active role in regulating monopolies. In oligopoly, the government prohibits collusion of firms.
In monopolistic competition, some policies exist. While in perfect competition, there is very
minimal government regulations, except to make markets more competitive.

Schools Division Office – Marikina City
Parang High School
Senior High School
NAME: __________________________________ Grade & Section: _____________ Date: _______
Activity Sheet # 23 in Applied Economics

Activity Title: “Market Structures”
Learning Competency:
1. Differentiate various market structures in terms of number of sellers, types of products,
entry/exit to the market, pricing power, etc.
1.1 Define monopoly, oligopoly, monopolistic competition and perfect competition
1.2 Explain reasons for existence of the market structures
1.3 Distinguish the market structures from one another
1.4 Identify how firms operate in each market structure
Part I Directions: Based on what you have learned regarding the market structures,
describe the differences of the 4 market structures by writing down your answers on the
column on each headings.

Part II Directions: Identify the market structure classification of the following
goods/services. Write 2-3 sentences explaining why each falls under monopoly, oligopoly,
monopolistic competition or perfect competition.

Lesson Materials and Activity Sheets in Applied Economics - Week 6

Uploaded by

Copyright:

Available Formats

Lesson Materials and Activity Sheets in Applied Economics - Week 6

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lesson Materials and Activity Sheets in Applied Economics - Week 6

Uploaded by

Copyright:

Available Formats

APPLIED ECONOMICS

1. Number of firms in the market

Figure 1 Different Market Structures

1|P age of Applied Economics – Week 6

Monopoly is a market structure characterized by a one firm (seller/producer) in the

Size of the firms operating under each Market Structure

Pricing Power of Firms have under each Market Structure

Uniqueness/Differentiation/Homogeneousness of Goods/Services under each Market

2|P age of Applied Economics – Week 6

Degree of Government Intervention/Restriction present under each Market Structure

3|P age of Applied Economics – Week 6

NAME: ____________________________ Grade & Section: _ Date: _

Activity Sheet # 23 in Applied Economics

4|P age of Applied Economics – Week 6

5|P age of Applied Economics – Week 6

You might also like