M2-Basic Microeconomics

Lesson 1 Competition Among the

Many
What Are Market Structures?
“Market structures” refer to the different market characteristics that determine relations
between sellers to each another, of sellers to buyers and more. There are several basic
defining characteristics of a market structure, such as the following:

 The commodity or item that’s sold and the extent of production differentiation.
 The ease or difficulty of entering and exiting the market.
 The distribution of market share for the largest firms.
 The number of companies in the market.
 The number of buyers and how they work with or against the sellers to dictate price and
quantity.
 The relationship between sellers.

Competition among the Many include:

1. Perfect Competition. Perfect competition describes a market structure, where a large

number of small firms compete against each other. In this scenario, a single firm does not
have any significant market power. As a result, the industry as a whole produces the socially
optimal level of output, because none of the firms can influence market prices.
2. Monopolistic Competition. Monopolistic competition also refers to a market structure, where
a large number of small firms compete against each other. However, unlike in perfect
competition, the firms in monopolistic competition sell similar, but slightly differentiated
products. That gives them a certain degree of market power, which allows them to charge
higher prices within a certain range.

Specific learning Objective

 Discuss and apply the concepts of Pure Competition and Monopolistic Competition

Pre task
Click the link below to read the article
https://www.usatoday.com/story/money/food/2020/06/30/the-largest-pizza-hut-and-
wendys-franchisee-is-expected-to-declare-bankruptcy/112046212/ (Links to an external
site.)Links to an external site.
While task
Download and read the Lecture-Handouts for Competition Among the Many Module 2
lecture 1.pdf download
Post task
Online Quiz for Competition among the Many. Deadline for submission is on or before
July 24, 2020.
References
https://online.aurora.edu/types-of-market-structures/ (Links to an external site.)Links to
an external site.
https://quickonomics.com/market-structures/Links to an external site.
Lesson 2 Competition Among the
Few
Introduction
Market structures provide a starting point for assessing economic environments in
business. An understanding of how companies and markets work allows business
professionals and leaders to accurately judge industry and market news, policy changes
and legislation and how the economy shapes important decisions.
What Are Market Structures?
“Market structures” refer to the different market characteristics that determine relations
between sellers to each another, of sellers to buyers and more. There are several basic
defining characteristics of a market structure, such as the following:

 The commodity or item that’s sold and the extent of production differentiation.
 The ease or difficulty of entering and exiting the market.
 The distribution of market share for the largest firms.
 The number of companies in the market.
 The number of buyers and how they work with or against the sellers to dictate price and
quantity.
 The relationship between sellers.

Competition among the Few include:

1. Monopoly

A monopoly refers to a market structure where a single firm controls the entire market.
In this scenario, the firm has the highest level of market power, as consumers do not
have any alternatives. As a result, monopolies often reduce output to increase prices
and earn more profit.

2. Oligopoly

An oligopoly describes a market structure that is dominated by only a small number of

firms. That results in a state of limited competition. The firms can either compete against
each other or collaborate. By doing so, they can use their collective market power to
drive up prices and earn more profit.
Specific learning Objective
Discuss and apply the concepts of Pure Monopoly and Oligopoly
Pre task
Read the article entitled "Preparing for black swan and grey swan
events" https://www.bworldonline.com/preparing-for-black-swan-and-grey-swan-
events/?fbclid=IwAR35xcESp1qkzFgfjJbyukhKv1Sf_wXSiFI4L3wtR-
xIWPyirTavUXDRC2o (Links to an external site.)Links to an external site.
While task
Download and read the lecture-handouts for Competition among the Few Module 2
lecture 2.pdf download
Post task
Online Quiz for Competition among the Few. Deadline of submission is on or before
July 24, 2020.
References
https://online.aurora.edu/types-of-market-structures/ (Links to an external site.)Links to
an external site.
https://quickonomics.com/market-structures/Links to an external site.