The document discusses different market structures and their impact on consumers. It defines four types of market structures - perfect competition, monopoly, oligopoly, and monopolistic competition - and provides examples of each. The characteristics and implications for consumers are described for each market structure. In particular, perfect competition leads to low prices and variety for consumers, while monopoly results in high prices and limited choices. Understanding the variations in prices, choices, and quality that different market structures produce helps consumers make informed decisions and get the best value.

1. Market Structures
and Their Impact
on Consumers
Week 5
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2. Market Structure
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• in economics, refers to
how different industries
are classified and
differentiated based on
their degree and nature of
competition for goods and
services. It is based on
the characteristics that
influence the behavior and
outcomes of companies
working in a specific
market.
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3. Types of Market
Structures
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• Perfect Competition
• Monopoly
• Oligopoly
• Monopolistic Competition
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4. Perfect Competition
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• Definition:
Many sellers offering similar
products
• Example:
Local Wet Market
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5. Monopoly
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• Definition:
A single seller dominating the market
• Example:
ANECO (or any Electric Cooperative in any area)
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6. Oligopoly
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• Definition:
A small number of large firms dominate the market.
• Example:
Telecom Industry (Globe and Smart)
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7. Monopolistic
Competition
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• Definition:
Many sellers offering differentiated products.
• Example:
Fast-Food Chains (Jollibee, McDonald's, Burger King)
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8. Characteristics of
Perfect Competition
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Characteristics:
• Many buyers and sellers
• Identical products
• Easy entry and exit
Implication for Consumers:
• Low prices
• wide choices
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9. Characteristics of
Monopoly
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•Characteristics:
• Single seller
• Unique product
• High barriers to entry
•Implication for
Consumers:
• High prices, limited
choices
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10. Characteristics of
Oligopoly
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• Characteristics:
• Single seller
• Unique product
• High barriers to entry
• Implication for Consumers:
• High prices, limited choices
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11. Characteristics of
Monopolistic
Competition
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• Characteristics:
• Many firms
• Differentiated products
• Some control over price
• Implication for Consumers:
• Variety of products, moderate prices
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12. Examples of Local
Markets
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• Perfect Competition Examples:
• Wet markets
• Sidewalk vendors
• Monopolistic Competition Examples:
• Food courts
• Bakeries
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13. Examples of National
Markets
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• Oligopoly Examples:
• Telecom industry
• Banking sector
• Monopoly Examples:
• Utility services (e.g., electricity)
• Government-owned companies
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14. Factors Influencing
Market Structures
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Factors:
• Government Regulation
• Barriers to Entry
• Product Differentiation
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15. Consumer Impact
How Market Structures Affect Consumers:
In the marketplace, prices exhibit diversity driven by factors such as production costs and
location, while choices vary due to competition, demographics, and innovation.
Product quality ranges from low to high, often linked to brand reputation and industry standards,
yet subjectivity plays a role in consumer perception.
Understanding these variations is crucial for informed decision-making in a dynamic
marketplace.

16. Consumer Impact (examples)
1. Prices:
1. Gasoline Prices: Gas prices can differ significantly between neighboring gas stations due to factors like location,
brand, and regional taxes.
2. Airline Tickets: The cost of a plane ticket can vary widely based on factors such as the time of booking, the airline,
seat class, and even the day of the week.
2. Choices:
1. Restaurant Menus: When dining out, restaurant menus often offer a range of choices, from affordable options to
premium dishes, catering to different tastes and budgets.
2. Smartphones: When shopping for a smartphone, consumers can choose from various brands, models, and features,
allowing them to find a device that suits their specific needs.
3. Product Quality:
1. Electronics: Consider the difference in build quality and performance between a budget laptop and a high-end one
from a reputable brand. The price reflects these quality disparities.
2. Clothing: In clothing stores, you may find both designer and generic brands. The quality of the materials and
craftsmanship often varies, affecting the price and durability of the items.

17. This will help consumers:
1.Budget Management: Consumers have limited financial resources. Variability in prices allows
them to find products and services that align with their budgets, helping them manage their
money effectively.
2.Personal Preferences: Every individual has unique tastes and preferences. Having a wide
range of choices ensures that consumers can select products that suit their specific needs
and preferences, leading to greater satisfaction with their purchases.
3. Value for Money: Consumers want the best value for their money. The ability to compare
prices and assess product quality helps them make informed decisions, ensuring they get the
most value for their hard-earned cash.

18. This will help consumers:
4. Quality Assurance: Variability in product quality means consumers can choose items that meet their quality
expectations. This is particularly important for products where safety and performance are critical, such as cars
or medical devices.
5. Competition and Innovation: Competition among businesses drives innovation and improvement. When
consumers have choices, companies are incentivized to continually enhance products and services to stay
competitive, benefiting consumers with better options over time.
6. Empowerment: A diverse marketplace empowers consumers, giving them the freedom to make choices that
align with their values, lifestyles, and needs, thus promoting consumer autonomy.
7. Consumer Advocacy: Understanding these variations enables consumers to advocate for their rights and
interests. They can demand transparency, fair pricing, and better quality, leading to improved industry standards
and consumer protection.