monopolies in a short paragraph, identify a company you think is a monopoly and explain why
TRANSCRIPT
Monopolies
In a short paragraph, identify a company you think is a monopoly and explain why.
Monopolies • On a sheet of paper, identify the first space (excluding
the corner spaces) you try to acquire on the Monopoly® board to win the game. If you do not have a space, pick one and answer the questions that follow.
• Why do you choose this space? • What is your next strategy to win the game?
Competition and Market Structures
Ch7 sec1
• Adam Smith-Wealth of Nations (1776), 18th century Scottish economist
Adam Smith…
• Laissez-faire, “let it be”, government should not interfere with commerce or trade.
Markets are classified according to certain structural characteristics:
“Market Characteristics”
Perfect/Pure Competition
This market situation includes independent and well-informed buyers and sellers of exactly the same economic product.
Monopolistic Competition
A market structure that has all the conditions of perfect competition except identical products.
Oligopoly
A market situation in which a few very large sellers of a product dominate is known as oligopoly.
Ex. Pepsi and Coke, McDonald's, Burger King, and Wendy's dominate the fast-food industry
Oligopolies
• Oligopolies have Interdependent Behavior-Whenever one firm does something, the other firms usually follow.
Pricing Behavior-oligopolies
– Collusion, a formal agreement to set prices or to otherwise behave in a cooperative manner.
– Price-fixing/Guarantee sales agreeing to charge the same or similar prices for a product-or divide market
Monopoly
A pure monopoly is a market situation with only one seller of a particular economic product that has no close substitutes. U.S. has few.
• Natural Monopoly
A natural monopoly-a market situation where costs are minimized by having a single firm produce the product.
• Geographic Monopoly
A business has a monopoly simply because of location-one type business in a small town.
• Technological Monopoly-the special privileges given to those who invent a new product or process
• Patent-good for 20 years
• Copyright-lifetime plus 50 years
• Government Monopoly
Government monopolies are found at the national, state, and local levels. In most cases, they involve products people need that private industry may not adequately provide.
Only one allowed in a specific area!
Warm Up
Define a monopoly and an oligopoly?
Characteristics of Market Structures
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition
Monopolistic
Competition
Oligopoly
Pure
Monopoly
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most
Monopolistic
Competition
Oligopoly
Pure
Monopoly
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most
Monopolistic
Competition Many
Oligopoly
Pure
Monopoly
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most
Monopolistic
Competition Many
Oligopoly Few
Pure
Monopoly
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most
Monopolistic
Competition Many
Oligopoly Few
Pure
Monopoly One
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None
Monopolistic
Competition Many
Oligopoly Few
Pure
Monopoly One
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None
Monopolistic
Competition Many Limited
Oligopoly Few
Pure
Monopoly One
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None
Monopolistic
Competition Many Limited
Oligopoly Few Some
Pure
Monopoly One
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None
Monopolistic
Competition Many Limited
Oligopoly Few Some
Pure
Monopoly One Extensive
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None
Monopolistic
Competition Many Limited
Oligopoly Few Some
Pure
Monopoly One Extensive
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None
Monopolistic
Competition Many Limited Fair
Amount
Oligopoly Few Some
Pure
Monopoly One Extensive
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None
Monopolistic
Competition Many Limited Fair
Amount
Oligopoly Few Some Fair
Amount
Pure
Monopoly One Extensive
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None
Monopolistic
Competition Many Limited Fair
Amount
Oligopoly Few Some Fair
Amount
Pure
Monopoly One Extensive None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None
Monopolistic
Competition Many Limited Fair
Amount
Oligopoly Few Some Fair
Amount
Pure
Monopoly One Extensive None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Oligopoly Few Some Fair
Amount
Pure
Monopoly One Extensive None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Oligopoly Few Some Fair
Amount
Some
Pure
Monopoly One Extensive None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Oligopoly Few Some Fair
Amount
Some
Pure
Monopoly One Extensive None None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Oligopoly Few Some Fair
Amount
Some
Pure
Monopoly One Extensive None None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy
Oligopoly Few Some Fair
Amount
Some
Pure
Monopoly One Extensive None None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy
Oligopoly Few Some Fair
Amount
Some Difficult
Pure
Monopoly One Extensive None None
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy
Oligopoly Few Some Fair
Amount
Some Difficult
Pure
Monopoly One Extensive None None Almost Impossible
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy Perfect:
None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy
Oligopoly Few Some Fair
Amount
Some Difficult
Pure
Monopoly One Extensive None None Almost Impossible
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy Perfect: None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy Gas Stations
Oligopoly Few Some Fair
Amount
Some Difficult
Pure
Monopoly One Extensive None None Almost Impossible
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy Perfect: None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy Gas Stations
Oligopoly Few Some Fair
Amount
Some Difficult
Autos
Fast Food-Burgers
Pure
Monopoly One Extensive None None Almost Impossible
Number of Firms in Industry
Influence over Price
Product
Differentiation
Advertising Entry Into the
Market
Examples
Perfect
Competition Most None None None Very Easy Perfect:
None
Monopolistic
Competition Many Limited Fair
Amount
Fair
Amount
Easy Gas Stations
Oligopoly Few Some Fair
Amount
Some Difficult
Autos
Fast Food-Burgers
Pure
Monopoly One Extensive None None Almost Impossible
Perfect: None
PembrokenopolyAssignment Part 1: Create a 40 space Monopoly® board. Substitute local/regional businesses and utilities for those on the original Monopoly® board. If possible, try to include (and group) all of the various types of monopolies and oligopolies discussed in Chapter 7 section 1. Also be prepared to identify and explain all previously discussed business organizations such as sole proprietorships, partnerships, etc.Design, color, and layout your Pembrokenopoly board just as the original is constructed.All designs must be school appropriate.