AP Microeconomics

Advanced Placement Microeconomics analyzing individual economic decision-making.

Scarcity and Opportunity CostSupply and DemandMarginal Analysis and Rational Decision-Making
Elasticity of Demand and SupplyMarket Structures: Perfect Competition to MonopolyConsumer and Producer Surplus
Price Controls and Real-World OutcomesTaxes, Subsidies, and Market EfficiencyExternalities and Public Goods
Mastering Free-Response QuestionsUsing Diagrams Effectively
Scarcity and Opportu...Supply and DemandMarginal Analysis an...Elasticity of Demand...Market Structures: P...Consumer and Produce...Price Controls and R...Taxes, Subsidies, an...Externalities and Pu...Mastering Free-Respo...Using Diagrams Effec...
Advanced Topics

Market Structures: Perfect Competition to Monopoly

The Many Faces of Markets

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.

Perfect Competition

Many firms, identical products, easy entry, and no control over price. Think of a farmers' market with many sellers.

Monopolistic Competition

Many firms, similar but not identical products (like different brands of cereal). Firms have some control over price.

Oligopoly

A few large firms dominate the market (think smartphones or airlines). Decisions by one company can impact the whole market.

Monopoly

Only one firm controls the market, like a local water utility. Monopolies have the most power over price and output.

Why It Matters

Market structure affects prices, consumer choice, efficiency, and innovation in the economy.

Examples

  • Grocery stores selling apples operate in a perfectly competitive market.

  • A single company selling electricity in a city is a monopoly.

In a Nutshell

Market structures range from perfect competition to monopoly, each with different levels of competition and control.

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Consumer and Producer Surplus