Organization of a market based on degree of competition; four basic market structures?

• A. Equilibrium price
• B. Perfect competition
• C. Market structure
• D. Monopoly

Answer: (D)

Market structure describes how a market is organized by how much competition firms face. The four main types are perfect competition, monopolistic competition, oligopoly, and monopoly. The option that represents a market organization with essentially no competition and a single seller is monopoly. In a monopoly, one firm has substantial control over the price and output because there are high barriers to entry and no close substitutes, which makes it the clearest example of a market structure defined by limited competition. The other choices don’t fit as well: equilibrium price is about where supply equals demand, not a market structure; a term like market structure is the umbrella concept; and perfect competition is another structure, not the specific one highlighted by the question.