Industrial Organization (IO) is the study of the structure of firms
and their interactions in markets. A firm is an organization that
buys resources to produce its products and then sells these products
in a market in order to earn a profit. One of the important issues
that IO addresses is how the structure of the market, such as the
number of sellers, affects prices and profits of the firm(s) in the
industry. This area is called market structure. Important
models of market structure include markets with many firms (perfect
competition), markets with a small number of firms (oligopoly), and
markets with a single firm (monopoly).
|