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 AdvertisingEntry Into the Market Examples Perfect Competition Monopolistic Competition Oligopoly Pure Monopoly

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMost Monopolistic Competition Oligopoly Pure Monopoly

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMost Monopolistic CompetitionMany Oligopoly Pure Monopoly

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMost Monopolistic CompetitionMany OligopolyFew Pure Monopoly

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMost Monopolistic CompetitionMany OligopolyFew Pure MonopolyOne

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionMany OligopolyFew Pure MonopolyOne

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimited OligopolyFew Pure MonopolyOne

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimited OligopolyFewSome Pure MonopolyOne

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimited OligopolyFewSome Pure MonopolyOneExtensive

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimited OligopolyFewSome Pure MonopolyOneExtensive

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount OligopolyFewSome Pure MonopolyOneExtensive

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount OligopolyFewSomeFair Amount Pure MonopolyOneExtensive

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount OligopolyFewSomeFair Amount Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount OligopolyFewSomeFair Amount Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount Fair Amount OligopolyFewSomeFair Amount Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount Fair Amount OligopolyFewSomeFair Amount Some Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Monopolistic CompetitionManyLimitedFair Amount Fair Amount OligopolyFewSomeFair Amount Some Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very Easy Monopolistic CompetitionManyLimitedFair Amount Fair Amount OligopolyFewSomeFair Amount Some Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very Easy Monopolistic CompetitionManyLimitedFair Amount Fair Amount Easy OligopolyFewSomeFair Amount Some Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very Easy Monopolistic CompetitionManyLimitedFair Amount Fair Amount Easy OligopolyFewSomeFair Amount SomeDifficult Pure MonopolyOneExtensiveNone

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very Easy Monopolistic CompetitionManyLimitedFair Amount Fair Amount Easy OligopolyFewSomeFair Amount SomeDifficult Pure MonopolyOneExtensiveNone Almost Impossible

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very EasyPerfect: None Monopolistic CompetitionManyLimitedFair Amount Fair Amount Easy OligopolyFewSomeFair Amount SomeDifficult Pure MonopolyOneExtensiveNone Almost Impossible

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very EasyPerfect: None Monopolistic CompetitionManyLimitedFair Amount Fair Amount EasyGas Stations OligopolyFewSomeFair Amount SomeDifficult Pure MonopolyOneExtensiveNone Almost Impossible

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very EasyPerfect: None Monopolistic CompetitionManyLimitedFair Amount Fair Amount EasyGas Stations OligopolyFewSomeFair Amount SomeDifficult Autos Fast Food- Burgers Pure MonopolyOneExtensiveNone Almost Impossible

Number of Firms in Industry Influence over Price Product Differentiation AdvertisingEntry Into the Market Examples Perfect CompetitionMostNone Very EasyPerfect: None Monopolistic CompetitionManyLimitedFair Amount Fair Amount EasyGas Stations OligopolyFewSomeFair Amount SomeDifficult Autos Fast Food- Burgers Pure MonopolyOneExtensiveNone Almost Impossible Perfect: None

Pembrokenopoly Assignment 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.