Market structure
Cambridge IGCSE Economics (0455) · Unit 3: Microeconomic decision makers · 9 flashcards
Market structure is topic 3.8 in the Cambridge IGCSE Economics (0455) syllabus , positioned in Unit 3 — Microeconomic decision makers , alongside Money and banking, Households and Workers. In one line: Market structure refers to the characteristics of a market, including the number and size of firms, the degree of product differentiation, and the ease of entry and exit. It affects firms' behavior and market outcomes like price and output.
This topic is examined in Paper 1 (multiple-choice) and Paper 2 (structured questions, including data-response items).
The deck below contains 9 flashcards — 6 definitions, 2 key concepts and 1 application card — covering the precise wording mark schemes reward. Use the 6 definition cards to lock down command-word answers (define, state), then move on to the concept and application cards to handle explain, describe and compare questions.
'market structure' in economics
Market structure refers to the characteristics of a market, including the number and size of firms, the degree of product differentiation, and the ease of entry and exit. It affects firms' behavior and market outcomes like price and output.
Questions this Market structure deck will help you answer
- › What are the key characteristics of perfect competition?
- › How does monopolistic competition differ from perfect competition?
- › What are the implications of high barriers to entry for existing firms in a market?
Define 'market structure' in economics.
Market structure refers to the characteristics of a market, including the number and size of firms, the degree of product differentiation, and the ease of entry and exit. It affects firms' behavior and market outcomes like price and output.
What are the key characteristics of perfect competition?
Perfect competition features many small firms, identical products, free entry and exit, and perfect information. In this market structure, firms are price takers, meaning they have no power to influence market price.
Explain 'barrier to entry' and give an example.
A barrier to entry is any obstacle that makes it difficult for new firms to enter a market. Examples include high start-up costs, patents, strong brand loyalty, and government regulations.
What is a monopoly and what is its main characteristic?
A monopoly is a market structure with only one firm dominating the market. The main characteristic is significant market power, allowing the monopolist to be a price maker and control supply.
Describe an oligopoly and its common features.
An oligopoly is a market structure with a few dominant firms. Common features include high barriers to entry, interdependence of firms (actions of one firm affect others), and potential for collusion or competition.
How does monopolistic competition differ from perfect competition?
Monopolistic competition differs from perfect competition due to product differentiation. Firms sell similar but not identical products and have some control over price, unlike price takers in perfect competition.
What does it mean for a firm to be a 'price taker'?
A price taker is a firm that must accept the market price for its product because it is too small to influence it. This is typical in perfectly competitive markets where many firms sell identical products.
Explain the concept of 'market power'.
Market power is the ability of a firm to influence the market price of a good or service. Firms with significant market power can raise prices above competitive levels without losing all their customers.
What are the implications of high barriers to entry for existing firms in a market?
High barriers to entry protect existing firms from competition, allowing them to maintain higher prices and profits. This reduces consumer choice and can lead to less innovation.
Key Questions: Market structure
Define 'market structure' in economics.
Market structure refers to the characteristics of a market, including the number and size of firms, the degree of product differentiation, and the ease of entry and exit. It affects firms' behavior and market outcomes like price and output.
Explain 'barrier to entry' and give an example.
A barrier to entry is any obstacle that makes it difficult for new firms to enter a market. Examples include high start-up costs, patents, strong brand loyalty, and government regulations.
What is a monopoly and what is its main characteristic?
A monopoly is a market structure with only one firm dominating the market. The main characteristic is significant market power, allowing the monopolist to be a price maker and control supply.
Describe an oligopoly and its common features.
An oligopoly is a market structure with a few dominant firms. Common features include high barriers to entry, interdependence of firms (actions of one firm affect others), and potential for collusion or competition.
What does it mean for a firm to be a 'price taker'?
A price taker is a firm that must accept the market price for its product because it is too small to influence it. This is typical in perfectly competitive markets where many firms sell identical products.
More topics in Unit 3 — Microeconomic decision makers
Market structure sits alongside these Economics decks in the same syllabus unit. Each uses the same spaced-repetition system, so progress in one informs the next.
Cambridge syllabus keywords to use in your answers
These are the official Cambridge 0455 terms tagged to this section. Mark schemes credit responses that use the exact term — weave them into your answers verbatim rather than paraphrasing.
Key terms covered in this Market structure deck
Every term below is defined in the flashcards above. Use the list as a quick recall test before your exam — if you can't define one of these in your own words, flip back to that card.
How to study this Market structure deck
Start in Study Mode, attempt each card before flipping, then rate Hard, Okay or Easy. Cards you rate Hard come back within a day; cards you rate Easy push out to weeks. Your progress is saved in your browser, so come back daily for 5–10 minute reviews until every card reads Mastered.
Study Mode
Space to flip • ←→ to navigate • Esc to close
You're on a roll!
You've viewed 10 topics today
Create a free account to unlock unlimited access to all revision notes, flashcards, and study materials.
You're all set!
Enjoy unlimited access to all study materials.
Something went wrong. Please try again.
What you'll get:
- Unlimited revision notes & flashcards
- Track your study progress
- No spam, just study updates