Market Structure

Market structure refers to the number of firms that produce a certain type of product. For example, there are two major producers of aircrafts (Boeing and Airbus) and a few smaller ones (like Bombardier) – but there are hundreds of thousands of independent convenience stores in America. The former is an example of an highly concentrated market structure (a.k.a. an oligopoly) – which typically has a very high barrier to entry and a strong ability to control prices. The latter is of a much more competitive market where the companies have very little control over prices (i.e. one store cannot sell a chocolate bar for $2 when everyone else sells it for $1).