Market Structure and its Types - Desklib

Running head: MARKET STRUCTURE
Market Structure
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MARKET STRUCTURE1
Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................5
References..................................................................................................................................6

MARKET STRUCTURE2
Answer 1
SingTel is the largest telecom company in Singapore. However, it has competitors in
the market. Few numbers of companies including SingTel dominate the industry SingTel
operates in. Entering in the industry is difficult for a new firm since, it is very expensive and
if any new firm manages to enter the industry, then exiting the industry will be difficult as the
industry is associated with large amount of sunk cost. The free market forces do not
determine the price in this industry as dominant firms decide the price of the product since
there are few firms and infinite number of customers. Thus, it is clear now that the market
structure in which SingTel operates is of oligopoly market structure and thus it has entry and
exit barriers. to In oligopoly market structure, marginal curve is downward sloping and lies
beneath demand curve like in monopoly structure of market. The price in oligopoly without is
given by the demand curve that is where marginal cost (MC) equals demand and average cost
(Tsitsiklis & Xu, 2014). However, if the firms collude with each other, then the firms would
charge price equal to the monopoly and supply quantity lower than the market demand.
Figure 1: Oligopoly market
Source: (Created by the Author)