which of the following facts determine the structure of a Market?
Answers
Answer:
Question
which of the following facts determine the structure of a Market?
Explanation:
Answer:
Number of Sellers: The number of firms selling a particular product on the market, determines the level of competition, ultimately choosing the structure of the market for that specific product.
Number of Buyers: Buyers decide the demand for a particular product. A monopsony market has multiple sellers and a single buyer who influences the price of the product.
Economies of Scale: The size of the firm or the level of production contributes to a market structure. If the output is done on such a large scale that it fulfils the market demand solely, it may create a monopoly market.
Nature of Product: The product features determines the type of market structure to which it belongs. If the products offered by different sellers are homogeneous, it lies in a perfect competition market. If it is unique and has no other substitute, it creates a monopoly in the market.
Entry Barriers: The profitability of a product invites the sellers to enter such markets. The market runs on the rule ‘survival of the fittest’ where weak firms exit and strong ones survive. There are some public utility service markets which run on monopoly by the government like post offices, railways, water supply, etc.
The mobility of Goods: Easy transportation of goods from production place to the market ensures uniform prices by different sellers.
Government Intervention: Some markets are indirectly controlled by the government. The government either imposes heavy taxes or makes the business license mandatory to restrict the entry of firms