• Market and industry are concepts with similar meanings.
• The sum of all firms which produce homogeneous goods is termed an industry.
• Goods and services produced by firms are sold in various market situations.
• These market situations can be termed market structures.

The following criteria can be used to classify a market structure.

Number of firms in the market.

• Nature of goods and services produced.
• Entry to and exit from market.
• Nature of competition among firms.

According to the changes of market features the nature of market structure varies / differs
Four market structures can be classified based on the above criteria.

• Perfect competition
• Monopoly
• Monopolistic competition
• Oligopoly

Market situations with ease of entry, a large number of firms which produce homogeneous products, is termed, Perfect competition

Perfect competition market has the following characteristics.

• Products are homogeneous
• A large number of buyers and sellers are present in the market
• Ease of entry to the market
• Perfect information can be taken about a market.

Close characteristics of Perfect competition could be seen in the agriculture, fishing, industry and mining industry

Market situations with one industry and one firm and barriers to entry is termed monopoly.

A Monopolistic market has the following characteristics.

• Only one firm is involved in production
• Specialty in production
• Barriers to entry to the industry
• Imperfect information on the market

Because one firm is in a monopolistic market, it can influence market price
Demand curve of monopoly is a downward sloping curve.
It can be illustrated as follows.

Supplier of monopolistic firms acts as a price maker.
Examples of a monopolistic market are, water supply, electricity, railway
etc.

The following factors determine entry to the monopolistic market.

• Ownership of basic inputs -> To avoid entry of other firms to produce the good.
• Government legislator obstructions -> Goods should be produced under government licences..
• Returns to scale -> Producing goods by institutions which are involved in the market ( Natural Monopoly).

Both characteristics of Perfect competition and Monopoly can be seen in a market situation which is called Monopolistic competition

The following characteristics can be illustrated in a Monopolistic competition market

• A large number of sellers.
• Differentiated goods.
• Ease of entry.
• Most exceptional characteristics of Monopolistic competition is differentiation of goods.
• Goods differentiation means, that every firm will differentiate his good with
  other supplies and provide it to the market.
• Because of differentiation of goods, one good of a firm is not a perfect
  substitute to another good of another firm
  Examples – different soaps, Tooth paste and Shoes

Because of differentiation of goods, production firms have to compete with each other, and this ability will strengthen them with the following factors.

• Quality of these good
• Price of good
• Marketing

• The demand curve of a monopolistic competitive market slopesdownwards.
• Oligopoly is defined by a limited number of firms in the market.

The following characteristics can be seen in Oligopoly

• These is a artificial or natural barriers to limit new firms entering the
  industry.
• There is a small number of firms competing in industry.
• Market imperious. (Imperious attitude in market)

The following are the barriers to limit new firms entering the industry

• Returns to scale.
• Goodwill.

• Because of a small number of firms in market the portion of market for each firm is relatively high.
• Therefore firms in the market are interdependent.
  Examples of Oligopolistic industries are newspapers, broadcasting
  services, soap, soft drinks commercial bank, Gas etc.