Question

What do you mean by competitiveness of the market structure?

Answer 1

Competitiveness of market structure refers to how much control a firm has over the price of its product. It depends on factors such as the number of firms, the type of products, and the ease of entry and exit. In perfect competition, firms are price takers with no control over price due to identical products and many sellers. In a monopoly, a single firm dominates the market and can set prices due to the absence of competition. Monopolistic competition and oligopoly lie between the two, where firms have some pricing power. The less control a firm has over price, the more competitive the market is.