In general we classify market structures into four types:

• perfect competition – many producers of a single, unique good.

• monopoly - single producer of a unique good (e.g. cable TV, diamonds, particular drugs)

• monopolistic competition – many producers of differentiated

goods (e.g. fast food)

• oligopoly – few producers, with a single or only slightly differentiated good (e.g. cigarettes, cell phones)

Exercise 3. Fill in the chart and characterize each model of the market.

Type of market structure	Perfect competition	Monopoly	Monopolistic competition	Oligopoly
1) Number of firms	1	2	3	4
2) Type of product	5	6	7	8
3) Control over price	9	10	11	12
4)Conditions of entry	13	14	15	16
5) Nonprice competition	17	18	19	20
6) Example	21	22	23	24

Reference words:

1) A very large number; one; few; many.

2) Standardized or differentiated; unique, no close substitutes; differentiated; standardized.

3) Some but within rather narrow limits; none; considerable, limited by mutual independence, considerable with collusion.

4) Relatively easy; very easy, no obstacles; significant obstacles; blocked.

5) Typically a great deal, particularly with product differentiation; mostly public relations advertising; none; considerable emphasis on advertising, brand names, trademarks.

6) Local utilities; steel, automobiles; agriculture; retail trade, dresses, shoes.

II. Practice in economic analysis

Exercise 4. Match the type of the market structure and its characteristics.

oligopoly	many firms, identical products
monopolistic competition	single firm, no close substitutes
perfect monopoly	several firms, similar products, degree of product differentiation varies depending upon the market
monopoly	many firms, similar products, slightly differentiated products

Exercise 5. Fill in the gaps with the proper type of the market structure.

• 1. Firms in a … …… all make a product that is perfectly substitutable: all demanders are equally satisfied with any supplier's product.

• 2. Consumers in a … …….can be induced to change brands but they have brand preferences.

• 3. Consumers in a…… …...can be induced to change suppliers but have only a limited number of choices.

• 4. ……. ….makes a product that has no good substitute. Other firms may be able to produce the good or service but choose not to enter the market or are barred from it.

Exercise 6. Define the type of the market structure for each of these products or firms: monopoly, oligopoly, monopolistic competition?

• Main transmission lines

• Adidas

• Auto VAS

• Domik v derevne (barishnia-krestianka)

• Talinka, Irbis

• The US agricultural products market

• Norilsk Nickel

• Railing production at KMK