A market is a place where buyers and sellers meet and interact. In today’s internet era, buyers and sellers don’t meet necessarily, but they interact and and perform their desired roles.
Market structure is best defined as the organisational and other characteristics of a market. There are some characteristics which affect the nature of competition and pricing.
The most important features of market structure are:
- The number of firms.
- The market share of the largest firms
- The nature of costs
- The degree to which the industry is integrated
- The extent of product differentiation
- The structure of buyers in the industry
Summary of market structures