1. The Competitive Market
BMI3C

2. Free Market An economy that allows: Profit Private Property
Competition

3. Profit
Money left over from sales after paying off all expenses and taxes
In a free market you are allowed to earn and keep a profit

4. Private Property
Private citizens and corporations can own property (land, equipment, etc.)
Individuals can use or dispose of things of value, as long as no laws are broken

5. Competition
You are free to go into any business you like (as long as it’s legal)
Competition drives prices down and fuels innovation

6. Canada Is Canada a “pure” free market?
Gov’t regulation (ex: minimum wage)
Gov’t monopolies (ex: VIA rail, Healthcare, etc)
Gov’t guides certain industries (subsidies for farming, oil & gas, etc.)
Canada is technically a “mixed economy”, like most nations.
Free Market Economy
Command Economy
Sweden
North Korea
USA

7. Competition Competition defines the structure of the market
The competitive market permits and encourages variety
Consumers have a choice of product styles, product types, price, and quality
There are 4 major market structures:
Perfect Competition
Monopolistic Competition
Monopoly
Oligopoly

8. Perfect Competition large number of small companies
no one company has control over the market
government legislation is required to restrict growth in order to avoid/prevent dominance by one company

9. Monopolistic Competition
consists of a large number of small firms
each has small opportunity for control

10. Oligopoly a small number of firms
each has a great opportunity for control

11. Monopoly
a single company has complete market control

12. What are some examples of industries that have…
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly

13. Discussion
Is Microsoft a monopoly?

14. Canada Canada regulates competition by not allowing: monopolies
price – fixing
restrictive mergers
exclusive dealing

15. Competition What are some of the ways that businesses compete?
Price (leads to R&D)
Service
Placement
Brand

16. MARKETING
Competition

17. Direct vs. Indirect Competition
Direct Competition is where products or services which perform the same function compete against each other.

18. More Direct Competition
Walmart and Target
Cineplex and Empire Theatres
McDonalds and Wendys

19. Direct vs. Indirect Competition
Indirect Compeition (or Substitute products) where products which are close substitutes for one another compete