Introduction to Market Structures (Online Lesson)

In this online lesson, we look at the characteristics and nature of different market structures, as well as some applied examples.

WHAT YOU'LL STUDY IN THIS ONLINE LESSON

• the characteristics of different market structures, including perfect competition, monopolistic competition, oligopoly and monopoly
• real-world application
• an introduction to contestable markets

Additional teacher guidance is available at the end of this lesson. Thank you to Peter McGinn, Penny Brooks and Jon Clark for their contributions to this lesson.

HOW TO USE THIS ONLINE LESSON

Follow along in order of the activities shown below. Some are interactive game-based activities, designed to test your understanding and application of market structures. Others are based on short videos, including activities for you to think about and try at home, as well as some extra worksheet-based activities.

If you would like to download a simple PDF worksheet to accompany the video activities, you can find it here. You can print it off and annotate it for your own notes, or make your own notes on a separate piece of paper to add to your school/college file.

ACTIVITY 1: VIDEO - OVERVIEW OF MARKET STRUCTURES

It's really important that you understand the relationships between the various market structures and how they "fit" along the spectrum of competition. This video helps you to gain that understanding.

ACTIVITY 2: VIDEO - INTRODUCTION TO PERFECT COMPETITION

This video provides an overview of perfect competition, looking at key characteristics and outcomes, as well as examples. As with all of the market structures covered in this lesson, you can cover them in more detail (along with the diagrams) in another online lesson.

ACTIVITY 3: ESSAYS - ONLINE COMPETITION

For this activity you will need to download this example essay, which considers the impact of online suppliers on levels of competition.

Tasks:

1. Read the essay carefully - highlight or underline all of the economic key terms mentioned in the essay and check that you can define them all
2. Identify any evaluation points and make a note of how you know that they would be regarded as evaluation
3. Note down 5 other examples of industries in which online supplier are providing effective competition

ACTIVITY 4: VIDEO - INTRODUCTION TO MONOPOLY

Monopoly is regarded as being at the opposite end of the spectrum of competition to perfect competition. This video introduces you to the basics of monopoly.

ACTIVITY 5: EXTENSION TASK - MONOPOLY AND MONOPSONY

A monopoly is a dominant seller of a product, and uses its market power to raise prices and reduce output. A monopsony is a dominant buyer of a product, and uses its market power to reduce prices of the products thata it buys. In reality, large firms can often be both monopolies and monopsonies.

To find out more about firms that fit this category, download this tutor2u resource and follow the instructions on the download.

ACTIVITY 6: VIDEO - INTRODUCTION TO MONOPOLISTIC COMPETITION

As with the video for perfect competition, this video provides an introductory overview of the market structure of monopolistic competition. Make sure that you can distinguish between perfect and monopolistic competition after watching it!

ACTIVITY 7: VIDEO - INTRODUCTION TO OLIGOPOLY

This video provides an overview of the fascinating market structure of oligopoly.

ACTIVITY 8: GAME - CATEGORISING MARKET STRUCTURES

Test yourself on your knowledge of different market structures by having a go at this interactive game!

ACTIVITY 9: VIDEO - EVALUATING THE MARKET STRUCTURE APPROACH

Economists describe the "spectrum of competition" and the impact that market structure has on the performance/behaviour of firms as the structure-conduct-performance paradigm. This video provides some evaluation points with regards to this approach.

ACTIVITY 10: SYNOPTIC THINKING

Download this synoptic assessment mat, and apply your introductory knowledge of market structures (along with a review of other topics from Year 12!) to the industry of motor vehicle repair.

ADDITIONAL TEACHER GUIDANCE

This lesson comprises:

• Around 55 minutes of guided video content. spread across 6 videos
• Around 20 minutes of student thinking and activity time throughout the videos
• 1 interactive game designed to review and test knowledge of market structure characteristics
• an activity in which students can read an essay about the impact of online suppliers on competition
• a synoptic practice activity, which also reviews key microeconomic concepts from Year 12
• a more demanding activity, looking at firms that have both monopoly and monopsony power