Comparing Market Structures

The below table compares the four market structures: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly.

Perfect Competition - The below graph depicts the demand curve for a single firm producing a small part of the supply. If the market price of their product applies to all buyers and sellers, they can sell any quantity they want at this price.

Monopolistic Competition - The below graph shows a profitable, monopolistically competitive firm. This shows an elastic, downward-sloping demand curve. The demand depends on the amount of competition to the firm. This curve is elastic because it is easy for customers to leave for the firm's competitors.

Oligopoly - The below graph illustrates a firm that belongs to an industry made up of only a few large firms. The demand curve is downward-sloping and inelastic below the kink as this is when the other firms price match.

Monopoly - The below graph shows a monopoly. The demand curve is not constant as the output is increased.