market structure
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meeting point of supply and demand for a product
~18 min read
Encyclopedic overview
Adam Smith Market structure, in economics, depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. Market structure makes it easier to understand the characteristics of diverse markets.
The main body of the market is composed of suppliers and demanders. Both parties are equal and indispensable. The market structure determines the price formation method of the market. Suppliers and Demanders (sellers and buyers) will aim to find a price that both parties can accept creating an equilibrium quantity.
Excerpted from Wikipedia’s “market structure” article, available under the CC BY-SA 4.0 licence.