3. Name two different market structures. Describe how and why they each have a different competitive situation.
Market structure is defined with characteristics of the market and there are four different market structures: perfect competition, oligopoly, monopoly and contestable market. Perfect competition is a market structure in which there is a large number of small firms who produce identical goods otherwise known as homogenous goods and it has a lot of buyers. The competition between these firms is huge, because they are many firms and each of them wants to attract more buyers. Oligopoly is a market structure in which there is a small amount of large firms, for example the supermarket industry. There are not so many buyers as in the perfect competition, but buyers can still choose from which supermarket, for example, they will buy. So there is a competition between the firms.