CLEP Microeconomics covers the fundamental concepts of microeconomic theory, including supply and demand, market structures, and the behavior of consumers and firms.
Market structures describe how markets are organized, from lots of competition to none at all.
Many sellers, identical products, and no barriers to entry. No single firm can influence the market price. Think farmers selling wheat.
Many sellers, but products are slightly different. Firms have some power over price because of branding or features. Think clothing brands.
Few large firms dominate. They might compete or cooperate. Barriers to entry are high. Think cell phone service providers.
One firm rules the market. It can set prices because it's the only source. This can lead to higher prices and less choice. Think local utilities.
The market structure affects prices, innovation, and consumer choice. Understanding this helps you see why some products are cheap and others aren't.
Supermarkets compete fiercely (perfect competition), but your water provider is a monopoly.
Sneaker companies use branding to stand out (monopolistic competition), while a few tech giants dominate app stores (oligopoly).
Market structures range from perfect competition to monopoly, shaping prices and choices.