Figure 7.2 illustrates the range of different market structures, which we will explore in Perfect Competition,

Monopoly, and Monopolistic Competition and Oligopoly.

FIGURE 7.2 The Spectrum of Competition Firms face different competitive situations. At one extreme—perfect

competition—many firms are all trying to sell identical products. At the other extreme—monopoly—only one firm is

selling the product, and this firm faces no competition. Monopolistic competition and oligopoly fall between the

extremes of perfect competition and monopoly. Monopolistic competition is a situation with many firms selling

similar, but not identical products. Oligopoly is a situation with few firms that sell identical or similar products.

Let's examine how firms determine their costs and desired profit levels. Then we will discuss the origins of

cost, both in the short and long run. Private enterprise, which can be private individual or group business
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