Course Syllabus_ ECON 1312 Page 4 of 4 I. Topics to Be Covered A. Introduction to microeconomics 1. Economic theory 2. Functional relationships 3. Marginal analysis 4. Equilibrium 5. Scarcity 6....

Market Structure
Table of Contents
1. Title Page
2. Table of Contents
3. Introduction
4. Research Question
5. Research Method
6. Types of Market Structure and Literature Review
7. Data Collection
8. Data Analysis
9. Conclusion
10. References
Market Structure
Part 1- Introduction
Market is a word that is commonly used to refer to a place where things are bought and sold. In economics, ‘Market’ is the broader structure that encompasses all areas of buying and selling related to products or services. Market in economics follows some form of structure. This can roughly be called Market structure. In essence, market structure can be defined as the type of competition prevalent in the market for goods and services. The nature, degree and type of competition in the market determine a lot of variables vital to the market.
All markets enjoy certain characteristics. Markets enjoy certain space or area, whether physical or virtual. Markets rely on the presence of a commodity. There are buyers and sellers in a market. There is competition in a market and there is some determined price for every commodity. So the determinants of the market structure are-
1. The number and nature of sellers
1. The number and nature of buyers
1. The nature of the product
1. The conditions of entry and exit from market
1. Economies of scale
Research Question- How does a monopoly affect a market in comparison to other types of markets?
Research Methods- In order to study this, this paper explores the literature on market structures and presents a concise view of the papers on the given topic. It also explains the structures through graphs. Saudi Electricity Company is examined and explained as a monopoly through tabular data.
Part 2- Forms of Market Structure with Literature Review
The market structure can take several forms. These forms are of the following types.
1- Perfect competition
2- Monopoly
3- Oligopoly
4- Monopolistic Competition
Perfect competition
In this market structure there are a huge number of small firms that sell homogenous products and compete against each other. This is the most competitive market structure where sellers entering or exiting the market does not make a difference and no one party can change or influence the prices of the goods. Closest example for this kind of competition would be grocery stores.
In perfect competition market structure there is a large number of both buyers and sellers. Sellers can enter and exit the market freely without any influence on the product price or the market as there is no government intervention in this kind of market structure in addition every seller can function independently.
The products are homogenous with the price fixed as per demand and sale. There are also no advertisement costs as there is perfect knowledge among the customers about the product and its qualities, therefore enabling them to make rational decisions in choosing the product they prefer without relying on artificial information such as advertisements.
So far there is hardly any industry that exhibits all the characteristics of perfect competition as it is very ideal and hard to achieve. According to Kirzner (2015), it even fails to assist in understanding the other markets. However, it can be considered the utopian kind of market structure that the market can struggle to reach in order to create fair competition and support market growth.
Monopoly
As opposed to the perfect competition structure, Monopoly in a market is where there is no competition at all, here one single firm/seller dictates the market by itself and sets its own rules, prices and has the freedom to bar any other competitor.
The product being sold is unique and there is no close competitor. Above all there can be barriers to other competitors entering the market which can be due to a number of reasons like copyright, patents, high costs for entering the market, economies of sales etc.
In such a market structure the prices are set by the firm. Hardly any factor has a say in determining the price of the product.
Monopoly market structure can be categorised as follows:
Natural Monopolies: When the cost and other factors like feasibility restrict the entry of new firms to a certain market it is termed as Natural Monopolies. They usually occur where capital costs dominate the market.
Government Monopolies: Organisations that are directly owned and driven by the government hold exclusive rights to a certain market to ensure fair prices and equal availability to all. In such a situation the market is said to be a...