Market Structures – AQA Spec

Market Structures – AQA Spec

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Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes 

What is a Market Structure?

The Market Structure refers to how the market is organised; there are four market structures:


Each Market Structure is characterised by:

The number of firms in the market

A market is more competitive when they are more firms in it

The degree of product differentiation

A market is less competitive if the products are more differentiated. In a perfectly competitive market, products are homogenous and have no product differentiation

Product differentiation can occur through price, branding, and quality

Ease of entry into the market

This refers to the number and types of barriers to entry

The market becomes less competitive if there are higher barriers to entry as producer surplus rises

Barriers to entry can be strategic (limit pricing or predatory pricing), structural (differences in production costs), or statutory (patents protect a franchise)


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