Recall the characteristics of market structures like monopoly and oligopoly, which are non-competitive. List two distinct features.
Full Answer
Non-competitive markets, such as monopolies and oligopolies, stand in contrast to perfectly competitive markets. Their key features include:
- **High barriers to entry:** Obstacles like high start-up costs, patents, or economies of scale prevent new competitors from entering.
- **Price-making power:** Firms are not 'price takers'. They have enough market power to set or influence the price of their goods.
- **Few firms:** The market is dominated by a single firm (monopoly) or a few large firms (oligopoly).
- **Product differentiation:** Products may be differentiated through branding, quality, or features to create customer loyalty.
Common mistakes
Listing features of a competitive market by mistake, or giving two features that are very similar (e.g., 'one firm' and 'few firms').
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