What are market structures?

A market structure is like the rules of a game that decide how sellers and buyers play together.

Imagine you're at a toy store. If there are only a few stores in town, it's like being in a big competition where each store tries to get more customers, this is like a oligopoly. It’s like a small group of friends playing a game, and they all want to win.

If there are lots of stores, and you can walk into any one of them, that’s like a perfectly competitive market. It's like choosing between many different ice cream shops, each one has the same kind of ice cream but maybe a little different flavor or price.

Sometimes, there might be just one big store that sells everything, that's like a monopoly. It’s like if you had the only toy store in town and could set the prices however you wanted.

If a few stores work together to keep prices high, it's like they’re forming a cartel, think of them as friends who all agree to take turns being the best seller so no one feels left out.