LO3: Understand the behavior of organizations in their market environment3.1 Explain how market structures determine firms' pricing and production decisionsMarket structure can be defined as a "set of buyers and sellers, who decided the price of goods and services. The basis of the market structure is the influence on the behavior that leads companies to work in that particular market". main of these structures are: perfect competition, monopoly, oligopoly and monopolistic competition.(Economicsonline, nd)At one end of the scale we have perfect competition: when there are many buyers and sellers in the market all the goods are homogeneous, there is perfect knowledge of the market for both producers and consumers, there is perfect mobility and there are no barriers to enter or exit the market. All prices of homogeneous goods would be set at a price determined by supply and demand of the market. A firm's output represents only a small portion of total output, and each consumer purchases a small portion of the total. No manufacturer, supplier or consumer has the power to influence the price in the market due to competition in the market. At the other end of the scale is monopoly where a single producer supplies the entire market, has market power and can influence supply and price due to lack of competition in the market. They cannot influence demand, however when demand increases they have all the power to change the price of goods. Actually the above two structures are not realistic in the real world, however companies can take on characteristics of monopolies such as gas stations at night where 99% of the shops are closed. One of the... advantages of the card... is that they are able to assert their rights more effectively across borders. The free movement of goods gave them a more open market in which to trade, opened the way to reach a larger market and gave the possibility for greater economic growth within businesses which led to economic growth within the Kingdom United as a whole. Competition policy: This is a policy that puts pressure on companies to offer the best range of products at competitive prices. They do this by monitoring agreements between companies that limit competition. Monitoring abuse of dominant position, such as when the EU blocked Ryanair's plans to take over Aer Lingus in 2006. As the combination of the two airlines would have created a monopoly on 35 routes to or from Ireland, resulting in less choice for consumers and the probable burden of increased costs according to (European Commission, 2012)