Which of the following is the primary factor that distinguishes one market structure from another in economics?

• A. The number of firms in the market
• B. The level of government regulation
• C. The amount of consumer income
• D. The type of goods produced

Answer: (A)

Verified step by step guidance

1. Understand that market structures in economics are primarily differentiated by characteristics that affect competition and market behavior.
2. Identify the key features that define market structures: number of firms, type of products, ease of entry and exit, and market power.
3. Recognize that while government regulation, consumer income, and product type can influence markets, they are not the primary distinguishing factors.
4. Focus on the number of firms in the market, as it directly impacts the level of competition and market dynamics, distinguishing structures like perfect competition, monopoly, oligopoly, and monopolistic competition.
5. Conclude that the primary factor distinguishing one market structure from another is the number of firms operating within the market.