Market Structures Worksheet

Most students can define monopoly and stop there, without a sense that most real markets sit somewhere in between perfect competition and monopoly. This worksheet builds that in-between understanding by asking students to place actual companies and industries along the competition spectrum and name the specific barrier keeping new firms out, whether that's high fixed costs, network effects, or a patent.

Plan for 40 to 45 minutes. The activity opens with small groups identifying three market structures using four criteria: how many firms exist, how easy entry is, how much pricing power a firm holds, and a real example of each. From there, groups move to placing five specific industries, local food trucks, major phone carriers, a dominant social-media app, a regional water utility, and a drug still under patent, onto the spectrum and naming the barrier to entry for each.

Part 3 asks students to work individually, picking three industries from the list and writing one sentence per industry that names both the market structure and the specific barrier to entry. This is where you'll see whether students actually understood "barrier to entry" as a mechanism or just memorized the term. A student who writes "high barrier" without saying what the barrier actually is, capital costs, an existing network, a patent, hasn't finished the thought.

This activity works well right after you've covered the basic market structure spectrum, since it asks students to apply vocabulary rather than learn it for the first time. It also sets up a good follow-up discussion about why some industries with only a few firms, like phone carriers, still compete hard on price, while others with just as few firms barely compete at all.

Group size matters more here than in most activities. Keep Part 1 groups to three or four students so everyone has to defend a piece of the four-criteria table out loud, rather than letting one student fill in the whole row while others watch. For Part 2, it helps to assign each home group one or two industries from the list up front rather than letting groups pick freely, since students left to choose on their own will gravitate toward the easy cases, food trucks and the water utility, and avoid the harder judgment calls around phone carriers and the social-media app.

This activity is from Module 32 of the Rapunzl curriculum, How Markets Work.

Perfect To Monopoly

You will master one market structure, then place real industries on the competition spectrum and explain the barrier to entry keeping competitors out — including network effects and control of key resources.

Part 1 — Group: Business Competition Structures

Work in groups to identify three types of market structures. Not the number of firms that likely exist, the ease of entry, how much power a firm has over price, and one real example.

Part 2 — Home group: place the industries

Work with your group to select where one industry resides on the business competition spectrum and name the main barrier to entry (or lack of one). Teach one structure to the entire class.

Part 3 — Your placement (individual)

Pick three industries from the list above. For each, write one sentence naming its market structure and the specific barrier to entry — competition, differentiation, high fixed costs, network effects, control of a key resource, or patents — that keeps new firms out.

Teacher Notes

Part 1 is a warm-up. Groups usually get faster at naming firm count and entry difficulty than they do at articulating pricing power, so budget extra time there and prompt with a question like "if this firm raised its price 10%, would customers have anywhere else to go?"

The real work happens in Part 2, where groups have to commit to a specific spot on the spectrum for tricky cases. Major phone carriers and the water utility are the two industries most likely to spark disagreement, since carriers look competitive on the surface, multiple companies, visible price wars, but sit close to an oligopoly once students dig into the barriers to entry, while a water utility is often the clearest example of a natural monopoly in the whole set.

In Part 3, watch for students who name a market structure correctly but reach for a generic barrier like "competition" when a sharper answer exists in the source material, network effects for the social-media app, or patents for the drug still under patent. That's the moment to push them to be specific rather than accept the first term that comes to mind.

When you review Part 3 responses, look for students who can explain why the barrier they named is durable rather than temporary. A patent expires and a network effect can erode, so a strong answer acknowledges that the barrier shapes the market today without treating it as permanent. That distinction is usually what separates a student who has internalized the spectrum from one who has just matched a term to an example.

The answer key for this activity, along with the other activities in this module, is in the Rapunzl teacher portal.

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