The structure of Ontario's higher education market

Abstract

Similar to many other institutions in a market economy, colleges and universities operate in their own 'marketplace'. The purpose of this paper is to provide analysis of the structure of Ontario's higher education market that is dominated by publicly funded universities. The theoretical framework for this paper is based on the theories of perfect and imperfect competition market structures. Analysis in this paper shows that Ontario's higher education market has some features of a monopolistic competition market. The paper also shows that other market structures (e.g., perfect competition, monopoly, oligopoly, and monopsony) do not represent Ontario's higher education market. While this market structure might not be consistent with the profit maximisation feature in a monopolistic competition market, analysis shows that it is consistent with other features. The combination of competition (many suppliers or institutions) and monopoly (product differentiation) can be seen in the market of higher education in Ontario.