Concentrated Markets

Quick revise


This is where there is a single producer in the market. Features:

  • One producer is able to charge relatively high prices
  • New products are rarely introduced
  • Resources are not used efficiently
  • Monopolies have market power
  • Monopolies are able to set prices – price setters


Few firms in the market who are interdependent in their actions. Firms consider competitors reactions when changing prices / introducing new products.

  • There is a high degree of competition
  • Businesses try and avoid price competition preferring non price competition
  • Products are branded and differentiated from each other
  • Can be many take-overs
  • Collusion may occur leading to cartels being formed