Factors such as the number of firms, the degree of product differentiation and ease of entry are used to distinguish between different market structures
Economists sort markets into categories called market structures. They use three key factors: how many firms compete, how similar their products are, and how easy it is for new firms to join the market.
Real World
Apple differentiates its iPhones through design and the iOS ecosystem, meaning it faces a downward-sloping demand curve unlike a perfectly competitive firm selling a homogeneous good.
Exam Focus
In 'distinguish' questions, explicitly contrast at least two factors across two market structures for full marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
How well did you know this?