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Definition
| A market situtation in which each firm and its competitors make their output and pricing decision on the assumption that their competitors will not change their prices from the current level. Although this could lead to a price war. |
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Definition
| A market structure characterised by a single seller, selling a unique product in the market. |
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Term
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Definition
| A market structure in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in the industry are low, and the decisions of any one firm do not directly affect those of its competitors. |
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Definition
| A market structure in which the following five criteria are met: 1) All firms sell an identical product; 2) All firms are price takers - they cannot control the market price of their product; 3) All firms have a relatively small market share; 4) Buyers have complete information about the product being sold and the prices charged by each firm; and 5) The industry is characterised by freedom of entry and exit. Perfect competition is sometimes referred to as "pure competition". |
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Term
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Definition
| Oligopoly is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the market. |
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