WASSCE SHS
Market structure is about how many firms there are, how easy it is to enter, and whether the product is identical. Those facts shape the firm's power over price.
In perfect competition there are many buyers and sellers, free entry, perfect information, and a homogeneous product. No single firm can change the market price. The firm is a price taker. The model is a benchmark. Few real markets meet every condition. Monopoly is the other pole: one firm supplies the market, entry is blocked, and the firm is a price maker, limited by the demand curve rather than by rivals. Between them sit monopolistic competition, with many firms and differentiated products, and oligopoly, with a few firms whose decisions affect each other.
When you compare them, use the same headings: number of firms, the product, entry, and price taking or price making. A list of names with no feature earns little. Advantages and disadvantages should be tied to the structure. Competition can push prices down and force efficiency. A monopolist may restrict output to keep the price up, and may also be able to fund research that small firms cannot. Say which effect you mean. Do not claim every monopoly is illegal. Some are created by law or by a natural barrier.
Price taker and price maker are precise. A perfect competitor is a price taker. A monopolist is a price maker. Homogeneous means identical in the buyer's eyes. Differentiated means distinguished by brand, quality or location. Oligopoly's special point is interdependence: each firm watches the others. If you omit that, you have only said "a few firms", which is incomplete.
These are practice questions in the style of the paper, with a model answer and a mark scheme. They are not a promise of what your paper will ask.
4 marks
State four features of perfect competition. (4 marks)
Many buyers and sellers, free entry and exit, a homogeneous product, and perfect knowledge. Firms are price takers.
4 marks
Distinguish between monopoly and oligopoly. (4 marks)
A monopoly has one seller and blocked entry, so the firm makes the price within the demand it faces. An oligopoly has a few firms. Each firm's decision depends on what the others do.
2 marks
Give one possible advantage and one possible disadvantage of monopoly. (2 marks)
A monopolist may earn enough to fund research. It may also restrict output and charge a higher price than a competitive industry would.
More questions on this topic are inside GLearn, marked as you answer, with the reason written out. The first ones need no account.
Practise Economics freeA firm that must sell at the market price. In perfect competition no single firm is large enough to change that price. A monopolist is a price maker. It chooses a price on the market demand curve, because it is the market supply.
A few firms supply the market, and each one's profit depends on what the others do. That interdependence is the point. It is not just "more than one firm", which would also describe perfect competition and monopolistic competition. All WASSCE Economics past questions