alleryStart learning →What defines the market structure of an industry?
AThe number of suppliers that operate in the market
BThe total value of the goods sold in the market
CThe rate at which prices change in the market
DThe share of output that the market exports
Answer & Solution
Correct answer: A. The number of suppliers that operate in the market
1. One characteristic of a free-market system is that suppliers have the right to compete with one another.
2. The number of suppliers in a market defines the market structure.
3. Economists build four types of market structure on that count of suppliers.
4. Sales value, price movements and export share describe activity in a market but do not define its structure.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.7 Competing in a Free Market_
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