Influence consumers have on market structure

• Pricing- consumers affect the pricing of commodities through actions such as collective bargaining; many buyers lead to a perfect type of market structure if the barriers to entry are low.
• Quality- consumers influence the quality of goods and services produced through lobbying for consumer protection laws avoiding the development of monopolies.
• Competition- through different tastes and preferences for commodities, consumers encourage competition among suppliers in markets such as monopolistic markets.
• Consumers also influence the nature of the market structure through their numbers; for example, a market that has only one buyer is a monopsony.

Influence producers have on market structures

Producers are the providers of goods and services in a market and have a different type of influence;

• Supply- producers influence the number of products supplied in the market, and this, in turn, affects the pricing.
• Barriers to entry- the technology adopted by producers affect the costs incurred by new entrants. Expensive technology invokes barriers to entry, limiting the number of entrants to favor oligopolistic or monopoly market structures.
• Pricing- producers affect the pricing of commodities by manipulating supply or colluding such as in oligopolies.