Senior High School

Self-Instructional Module
for
Senior High School Learners

Grade Level: 11
Specialized Subject: Applied Economics
Semester: First
Module 5

LEARNING COMPETENCY:

Differentiate various market structures in terms of a.) Number of sellers;

b.) Types of Products; c.) Entry/exit to markets; d.) Pricing power; e.) others
(ABM_AE12-Ie-h-7)

1
Specialized Subject (Applied Economics) – Senior High School

Alternative Delivery Mode

Quarter 1 – Module 5: Market Structures
First Edition, 2020

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Published by the Department of Education

Division of Lapu-Lapu City

Development Team of the Module

Writer’s Name: Karl R. Altubar

Editor’s Name: Czarina Ritzko J. Sagarino Janice P. Cabahug Jessica M. Ngujo
Nickjohn C. Babatu-on Earl Adrian C. Cejas Karl R. Altubar
Reviewer’s Name: Teresita A. Bandolon Marigold J. Cardente Dr. Bryant C. Acar
Illustrator’s Name:
Layout Artist Maria Teresita D. Amion Marieta R. Ferrer
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Management Team:
Schools Division Superintendent : Wilfreda D. Bongalos, PhD, CESO V
Assistant Schools Division Superintendent: Marcelita S. Dignos, Ed.D, CESE
Curriculum Implementation Division Chief : Oliver M. Tuburan, Ed.D.
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EPSVR - LRMDS : Teresita A. Bandolon
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Printed in the Philippines by Department of Education – Division of Lapu-Lapu City

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Lapu-Lapu City Division
Office Address: B.M. Dimataga St., Lapu-Lapu City
Tel No. (032) 410-4525
Email Address: [email protected]

2
 Lesson: Market Structures

Introduction

Hello there! Again, you are to embark on a wonderful journey towards

learning the four basic market structures. This learner-friendly module has been
crafted to guide and assist you in exploring the key concept and zooms in on the
key characteristics of the different market structures. The module also provides
an overview on the nature and extent of competition within the market and how it
affects every economic actor’s behavior, motivation, opportunities and decisions.

Our objective is to make your journey meaningful and relevant for you as
a Senior High School student and to prepare you to do market-structure analysis
and strategic decision-making as an economic actor yourself. While we help you
achieve your goal for learning, we also want you to enjoy this journey!

Learning Goals!

At the end of the module, you should be able to:

a. Differentiate various market structures in terms of a.) number of sellers; b.) types of
products; c.) entry and exit to market; d.) Pricing power; e.) others (ABM_AE12-Ie-h-7)
b. Identify the characteristics of the different market structures;
c. Complete a chart detailing the attributed features of the different market structures;
d. Elaborate on the benefit one can derive from indulging in the study of the topic;
e. Share one’s emotion, feeling, experiences, and learnings in doing the activities.

3
 Let’s Find What You Know!

Instructions: Read carefully the situations below. Choose the best option provided
therein. Encircle the letter of your choice.

1. The Philippine archipelago is composed of 7,107 islands. Such fragmented shape

poses a great challenge and hampered the movements of its people going and
through from one island to another. Most inhabitants prefer to travel by air.
Currently, millions of Filipinos availed and patronized the services of the 3 major
airline companies in the country. In the situation cited, what market structure is
highlighted?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

2. The presence of the Mactan-Cebu International Airport made the highly urbanized
city of Lapu-Lapu as the gateway towards the tourist flocked island of Cebu and
neighboring islands of Bohol, Camotes, Bantayan, and Malapascua. Over the
years numerous resorts, casinos, hotels, and condominium buildings have
sprouted like mushrooms causing the demand for energy to tremendously
increase. The Mactan Electric Cooperative is popularly known as “MECO” has
secured the sole franchise of providing electric power distribution in the area.
Which market structure was vividly exemplified in the example given?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

3. One may notice that most products that appear in a television advertisement are
consumer goods which are made to look and perceived as totally different from
other similar existing products in the market. Like for instance detergent powder,
for some reason makers of Ariel claims that their product is different from Surf,
Champion, Calla, and Bonux. In which market structure, product differentiation is
more visible?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

4. Janice and Frey decided to have a “Bugasan Center” in Cordova. They rented,
repaired, and occupied a stall in the public market. Their store is just one of the
many stores that sell rice. Due to the relatively large number of sellers in the
market, Janice and Frey cannot impose or set their prices other than the existing
market price. Which market structure was referred to in the above situation?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

5. Jessica and Donald have the power to set the prices of petroleum products in
Bantayan island. They happened to be the operator of the sole gasoline station
there. With no other options, people continue to patronize their products. In
which market structure the seller has such capacity?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

4
6. Danjie and Ramses are public school teachers assigned in a far-flung barangay
in Cebu City and both used their motorcycle in going back and forth to school.
Weekly, they spend a couple of hundred pesos for the gasoline. Also, the teachers
observed that every time there is a price change, may it be an increase or
decrease in prices it seems that all oil companies imposed the same price change
and thereby thought that the companies are colluding with each other. In which
market structure, “collusion” is more possible to occur?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

7. When a group of stores offers totally the same or homogeneous products to its
customers, they tend to be price takers than price setters. What market structure
is being characterized in the situation above?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

8. Every quarter the following phone makers Vivo, Oppo, Samsung, Xiaomi, and
Realme released a newer and improved version of their flagship and midrange
phones to capture more market shares. Competition is more visible. Each
company establishes concept stores in almost all malls nationwide. They offer
a wide array of displays of their products giving probable customers first-hand
experience in manipulating the eyed unit. The market for mobile phones fall
under what market structure?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

9. If examined closely in the market structure spectrum, in which market structure,

the sellers enjoy greater market power especially in setting the quantity and
price of commodities?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

10. Companies like Colgate-Palmolive Philippines, Proctor and Gamble

Philippines, and others aim to develop brand loyalty among consumers.
Making their names synonymous with the product itself is a dream come true.
What market structure affords greater market power once it succeeds in
creating brand loyalty?
a. Monopoly c. Oligopoly
b. Monopolistic Competition d. Perfect Competition

5
Task 1: Pics of the Past and Present!
In the previous module, you have learned that the existence of “market, tiangge, o pamilihan”,
is undeniably significant in addressing our needs and wants. Further, it affords us access to
essential needed goods and services.
Instructions: To successfully navigate your way towards accomplishing this activity, you
need to make use of what you have earlier learned. In here, your tasked determine which of
the pictures below can be considered as a market. Draw a inside the boxes beside the
pictures of your choice.

1. https://www.bworldonline.com/robin sons-allots-p5b-
5. 9.
/

2. 6. 10.

3. 7. 11.

4. 8. 12.

Note: All pictures are used solely for ILLUSTRATION PURPOSES ONLY. CREDIT to the OWNER.

Guide Questions:
1. How many of the pictures you have considered as markets?
2. How many of the pictures you have considered not markets?
3. Why were the following pictures not considered as markets?

4. Is the concept of market exclusively tied to a physical structure like a

building?
5. Can there be a market even in the absence of a structure?

6
Task 2: Ready, Set, and Juggle the Words.
Let us gauge how much prior knowledge you currently have about the various market
structures.

Instructions: Complete the puzzle by filling up the boxes with the letters of the right word.
Please pay attention to the clues provided in the boxes below.
6.

8.
1.
3. 10. 11.
2. - 9.

4.

-
5.

DOWN
ACROSS
1. Products that are the same or alike.
2. A Market structure that possesses
2. A market structure characterized by
the characteristics of perfect compe-
the presence of few suppliers
tition and monopoly
dominating the industry.
4. Means one or sole
6. A place where buyer and seller meet
5. Is a non-competitive, secret and
for a transaction.
sometime illegal agreement between
9. It means sellers cannot set or
competing firms.
influence the market price
6. A market structure where there is a
10. A product that differs slightly from
single supplier/ seller.
other in the same market
8. Means hurdle, obstacle, hindrance
11. It means one of a kind, unlike
anything else

Reflect:
How did you find the activity? Was it easy, or difficult?
__________________________________________.

7
Task 3: Bits and Pieces of Me!
Instructions: Now in this part of the module, you will be tasked to correctly group the
characteristics of the numerous market structure. The characteristics are color-coded to guide
you to which column it belongs. Start with the first column which is intended to be placed in
the 2nd row. Write your answer on the vacant rows in the table below. Be wary not to misplace
any of the attributes in the wrong column.

Exercises a great Entry into the

Sole/Single seller Products are
degree of market market is almost
in a market homogeneous impossible
power

Extensive barriers are

Few sellers in an Products are No capacity to
observed preventing
industry unique influence or affect entry of competitors
the market price

A large number of Products are Exercises a small Firms have freedom

slightly degree of market of entry and exit from
sellers
differentiated power the market

A very large Products are Exercises a relative Relatively low

number of sellers homogeneous/ degree of power restriction on entry
differentiated but not as intensive and exit

Characteristics Perfect Monopoly Monopolistic Oligopoly

Competition Competition

Number of
Sellers

Nature of
Product

Degree of
Market Power

Ease of
Entry/Exit in
the Market

Guide Questions:
1. Is it necessary for an individual to be familiar with the characteristics of the various
market structures? Why?
2. What practical benefit/s would it bring to us?

8
 Let’s Think Deep!

Task 4: Zoom in and Analyze the Market!

Instructions: This part of the module would seek to reinforce your learning on the
characteristics of the different market structures. Your task is to analyze the picture and
identify which market structure the following pictures belong to. Select whether it is “Perfect
Competition, Monopolistic Competition, Oligopoly, and Monopoly”. Write your answer to the
space provided.

https://www.rappler.com/nation/249022-airlines-help-repatriation-

https://www.bworldonline.com/phl-telcos-seen-to-

https://ph.priceprice.com/toothpa

https://www.smallbasket.com.ph/products/uni

https://www.tryandreview.com/ph/perso nal-
care/oral-

https://twitter.com/mecomactan

https://primer.com.ph/tips-guides/2016/08/25/list-
of-

https://www.pinterest.ph/pin/493214596678306594/

Note: All pictures are used solely for ILLUSTRATION PURPOSES ONLY. CREDIT to the OWNER.

9
 Let’s Remember!

Concretize Me Well!
Instructions: It is high time for you to interact with the content of this module. Read
thoroughly and understand the various concepts presented in the diagrams below and
answer the succeeding activity that follows.

Classification of Market Structure

Imperfect Competition
PerfectPerfect Competition
Competition Monopolistic
Oligopoly Monopoly
Competition A. Monopoly
B. Monopolistic Competition
C. Oligopoly

The further to the left entails lesser difficulty of entry and exit from the market

Perfect Monopolistic
Oligopoly Monopoly
Competition Competition

The further to the right the greater the Degree of Market Power

Attributes
of Perfect
Competition

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m the market. ATTRIBUTES OF MONOPOLY

1 There is a single seller in the market.

2 The product is unique.

3 The seller excises intense market power.

4 Entry to the market is almost impossible.

ATTRIBUTRES OF MONOPOLISTIC COMPETITION

1 Large Number of competing firms.

2 Products are similar but slightly differentiated.

3 Have relatively small influence in the market price.

4 There is freedom of entry and exit from the market.

ATTRIBUTES OF OLIGOPOLY

1 Few or relatively small number of sellers within an industry.

2 Homogeneous or differentiated products.

3 Exercise some pricing power but not as great as that of monopolist.

4 There is intensive restriction to entry and exit from the market.

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 Task 5: Gauging The Depth!
Instructions: Based from the information above, you are task to critically think
and share your insight on the succeeding questions. Kindly include a short
explanation of your answer. Write your answer on the scroll.

What is the most ideal type of

market structure?

As a consumer, which
market stucture is the best?

For the sellers which market

stucture is the best?

Guide questions:
1. Does the number of seller has something to do with ability to impact or influence the
market price? _______________________________________________________

2. Considering the nature of products sold either homogeneous, differentiated, and with
no substitute, which products provides greater opportunity for sellers to affect the
market price? _______________________________________________________

3. Do you still believe that the study of the various market structure essential in one’s
life? _______________________________________________________________________

12
 Let Me Apply It!

Task 6: Let Me Know What You Think!

Instructions: Read and examine closely the propositions below. You’re required to react
to each proposition. If you happened to agree or disagree with it, kindly write your answer
on the appropriate column.

AGREE DISAGREE

Primary Market
Structures are
classified as Perfect
and Imperfect

Perfect Competition
and Monopoly are
both the extreme
ends of the Market
Structure Spectrum

Monopoly,
Monopolistic
Competition and
Oligopoly are examples
Of Imperfect Market
Structure

In Monopoly sellers
doesn’t have the
power to set its
own price

Monopoly relies on
Advertisement to
Differentiate their
products as well as
create brand
loyalty among
buyers

13
 AGREE DISAGREE
Shampoo’s,
. lotions,
Sodas, Fast-food
products and alike are
examples of products
under OLIGOOLY.

Products sold under

Perfect competition
are homogeneous.

Since there are only

few sellers in Oligopoly
There is a big probably
for sellers to collude
among themselves to
Affect the price.

Oil companies like

Shell, Petron, Caltex,
Pheonix, SeaOil
Operates under
Monopolistic Competition.

Due to the relatively

High number of sellers
in a Perfect Competition
sellers have no way of
impacting or influencing
the market place.

Product of differentiation
is greater in
Oligopoly compared
to Monopolistic
Competition.

Guide Questions:
1. How did you feel after doing the activity?
2. Were you confident enough in answering the activity?
3. What do you think is the most important insight you have learned today?

14
 Let’s Ponder!

Task 7: Open Up, Loosen Up!

Instructions: Here in this activity you are required to reflect on your learning
experiences as you work your way to accomplish the various activities in this
module. Kindly share your insights, realizations, and experiences by writing and
filling up each of the four quarters of the diagram.

• _________________ • __________________
_________________ __________________
_________________ __________________
_________________ __________________
_________________ __________________

I would like to
I confidently learn more
learned.... about....

I most
I struggled enjoyed in....
with and need
to work on.... I least
• ________________ enjoyed in.... • _________________
________________ _________________
________________ _________________
________________ _________________
________________ _________________

15
 Let’s Check It!
Instructions: Read carefully the situations below. Choose the best option provided
therein. Encircle the letter of your choice.

1. The Philippine archipelago is composed of 7,107 islands. Such fragmented shape

poses a great challenge and hampered the movements of its people going and
through from one island to another. Most inhabitants prefer to travel by air. Currently,
millions of Filipinos availed and patronized the services of the 3 major airline
companies in the country. The airline industry in the country is an example of an
Oligopoly. Which of the statement is true about Oligopoly?
a. A market structure characterized by the presence of a single seller
b. A market structure characterized by the presence of a few dominant sellers.
c. A market structure characterized by the presence of a large number of sellers
d. A market structure characterized by the presence of homogeneous products

2. The presence of the Mactan-Cebu International Airport made the highly urbanized
city of Lapu-Lapu as the gateway towards the tourist flocked island of Cebu and
neighboring islands of Bohol, Camotes, Bantayan, and Malapascua. Over the years
numerous resorts, casinos, hotels, and condominium buildings have sprouted like
mushrooms causing the demand for energy to tremendously increase. The Mactan
Electric Cooperative is popularly known as “MECO” has secured the sole franchise of
providing electric power distribution in the area. Which of the statement below is not
a characteristic of a monopoly?
a. The market is controlled by a single seller
b. The market barrier for entry and exit is fairly easy.
c. The monopolist has the ultimate decision on price and quantity to sell.
d. Monopolist produced goods and services which have no close substitutes

3. One may notice that most products that appear in a television advertisement are
consumer goods which are made to look and perceived as totally different from other
similar existing products in the market. Like for instance detergent powder, for some
reason makers of Ariel claims that their product is different from Surf, Champion,
Calla, and Bonux. How product differentiation is done in monopolistic competition?
a. Price
b. Quality
c. Packaging
d. All of the above

4. Janice and Frey decided to open a “Bugasan Center” in Cordova. They rented,
repaired, and occupied a stall in the public market. Their store is just one of the many
stores that sell rice. What is the negative implication of a relatively large number of
sellers in the market to Janice and Frey’s business?
a. They will have many customers.
b. They can set or in a way influence the market price.
c. They cannot set or influence the market price.
d. There is a need for them to advertise their products.

5. Jessica and Donald have the power to set the prices of petroleum products in
Bantayan island. They happened to be the operator of the sole gasoline station there.
With no other options, people continue to patronize their products. Why do
monopolists have almost complete control of prices?

16
 a. Because they are the seller in the market
b. Because companies collude to ensure more profits
c. Because their products are similar to that of other sellers
d. Because customers are more loyal and patronize their company over their
competitors.

6. Danjie and Ramses are public school teachers assigned in a far-flung barangay in
Cebu City and both used their motorcycle in going back and forth to school. Weekly,
they spend a couple of hundred pesos for the gasoline. Also, the teachers observed
that every time there is a price change, may it be an increase or decrease in prices it
seems that all oil companies imposed the same price change and thereby thought
that the companies are colluding with each other. Why is collusion likely to happen in
Oligopoly?
a. Because firms agreed to engage in price competition.
b. Because of the competition among a large number of sellers.
c. Because firms opted to work together to maximize profit
d. Because firms decided to develop brand loyalty to ensure a profit

7. When a group of stores offers the same or homogeneous products to its customers,
they tend to be price takers than price setters. How the offering of the same or identical
products lead to sellers' inability to set the price?
a. Because the supply is limited
b. Because the products sold have no close substitute
c. Because buyers do not possess relevant information about the market.
d. Because there are many sellers which buyer can always go to when the price is
beyond the equilibrium

8. Every quarter the following phone makers Vivo, Oppo, Samsung, Xiaomi, and
Realme released a newer and improved version of their flagship and midrange
phones to capture more market shares. Competition is more visible. How come sellers
only have limited price control in Monopolistic Competition?
a. Because there is only a single seller in the market
b. Because the nature of products is the same or similar.
c. Because the market is dominated by many buyers in the market
d. Because buyers possess relevant information on price and product differences

9. Don Earl is the owner of Cejas Maritime and Shipping Lines, the only shipping
company that plies the Mactan-Camotes; and Mactan-Tubigon routes. While Rachel,
Rey, and Rulie own their respective company that supplies of bunker fuel to Don
Earl”s company. Which company enjoys more market power?
a. Don Earl’s Company c. Rachel’s Company
b. Rey’s Company d. Rulie’s Company

10. Companies like Colgate-Palmolive Philippines, Proctor and Gamble Philippines,

and others aim to develop brand loyalty among consumers. Making their names
synonymous with the product itself is a dream come true. Which of the following
statement does not depict the importance of brand loyalty among companies in
monopolistic competition?
a. It assures the company of greater profit
b. It ensures product patronization by loyal customer
c. It gives firms greater ability to influence the market price
d. It allows the consumers greater freedom to choose among rival firms.

17
 Glossary
The following terms used in this module are defined as follows:

Perfect Competition A market structure characterized by a large

number of sellers and buyers, identical or
homogeneous products, no single seller or buyer
can influence the price, relatively easy
entry and exit from the market.

Price-Takers Refers to sellers that must accept the prevailing

prices in the market of its products, its transactions
are incapable to affect the market price.

Monopoly A market structure characterized by the presence

of a sole supplier or seller.

Monopolistic Competition A market with many sellers of products that have

similar

Differentiated Products A product that differs slightly from others in the

same market.

Oligopoly A market with a small number of suppliers or

sellers.

Collusion Is a non-competitive, secret and sometimes illegal

agreement between rivals which attempts to disrupt
the market's equilibrium.

18
19
Let's Find What You Know.
1. C 5. A 9. A
2. A 6. C 10. B
3. B 7. D
4. D 8. B
Do This Task 1: Pics of the Past and Present!
1. * 5. * 9. *
2. * 6. * 10. *
3. * 7. * 11. *
4. * 8. * 12. *
Guide Question:
1. 12 2. 0 3. Answer May Vary 4. No 5. Yes
Do This Task 2: Ready, Set, and Juggle the Words!
6.M O N O P O L Y
A
8.B A R R I E R
1.H K
O 3.O E 10.D 11.U
2.M O N O P O L I S T I C - C O M 9.P E T I T I O N
O I R F I
G G I F Q
E 4.O C E U
N P E R E
E O - E
O 5.C O L L U S I O N T N
U Y A T
S K I
E A
R T
E
D
Guide Questions:
The answer may vary
Answer Key
20
Do This Task 3: Bits and Pieces of Me!
Characteristics Perfect Monopoly Oligopoly
Competition
Number of A very large Sole/Single seller A large number Few sellers in
sellers number of in a market of sellers an industry
sellers
Nature of Products are Products are Products are
Product Products are unique slightly
differentiated
Degree of Market Exercises a Exercises a Exercises a
Power No capacity to great degree small degree relative degree of
influence or of market of market power but not as
affect the power power intensive as
market price
Ease of Entry/Exit Firms have Entry into the Relatively low Extensive barriers
in the Market freedom of market is restriction on are observed
entry and exit almost entry and exit preventing entry
from the impossible of competitors
market
Guide Questions: The answer may vary
Do This Task 4: Zoom in and Analyze the Market!
1. Oligopoly 4. Monopoly
2. Oligopoly 5. Monopolistic Competition
3. Monopolistic Competition 6. Perfect Competition
Do This Task 5: Gauging the Depth
Answer may vary
Guide Questions: The answer may vary
Do This Task 6: Let Me Know, What You Think
1. A 5. D 9. A
2. A 6. D 10. D
3. A 7. D 11. A
4. D 8. A 12. D
Do This Task 7: OPEN UP, LOOSEN UP
- Answers may vary
Let’s Check It:
1. B 5. A 9. A
2. B 6. C 10. D
3. D 7. D
4. C 8. D
 References:

Websites:

https://laecon1.lyryx.com/textbooks/CURTIS_PRIN_MIC_1/marketing/CI-Principles-
of- Microeconomics-2017B.pdf

https://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1002&context=agecon_textbooks

https://openstax.org/details/books/principles-microeconomics-2e

For inquiries or feedback, please write or call:

Division of Lapu-Lapu City

Department of Education
B.M. Dimataga St., Lapu-Lapu City
Tel #: (032) 420-4525
Email: [email protected]

21