Advanced Placement Microeconomics analyzing individual economic decision-making.
Not all markets work the same way! Economists group markets into different structures based on how many firms there are, how easy it is to enter, and how much control over price each firm has.
Many firms, identical products, easy entry, and no control over price. Think of a farmers' market with many sellers.
Many firms, similar but not identical products (like different brands of cereal). Firms have some control over price.
A few large firms dominate the market (think smartphones or airlines). Decisions by one company can impact the whole market.
Only one firm controls the market, like a local water utility. Monopolies have the most power over price and output.
Market structure affects prices, consumer choice, efficiency, and innovation in the economy.
Grocery stores selling apples operate in a perfectly competitive market.
A single company selling electricity in a city is a monopoly.
Market structures range from perfect competition to monopoly, each with different levels of competition and control.