2. Market Structures [How many sellers in each industry]

3. Monopoly Oligopoly Technological Monopoly “Patent” Ex: Rubik’s Cube Government Monopoly Owned & operated by G Ex: U.S. Mail State Highways Natural Monopoly Competition would be chaotic. It is natural to give it to one co. Ex: Utilities Geographic Monopoly Only seller in a specific area Example: Remote Store Greyhound Forney High Basic Cable Rate Cable TV WasteManagementTXU U.S. Mail Rubik’s Rubik’sCube Monopoly [ mono(1) poly (seller)] Control over price: Total Product: unique Ex: Comcast Cable TV Monopolistic C ompetition [Element of monopoly with “product differentiation”] Many [25-75] sellers Control over price: Some Ex: Blue Jeans “ Price Makers ” Market [buyer & seller]Structures [How many sellers] Oligopoly Oliogo (few) poly (seller) [A few control 70% of market Differentiated O ligopoly Differentiated Products Autos & Sneakers Pure Oligopoly Identical Products (steel) Control over price: Fair Amount Differentiated or Identical Perfect Competition Very many [100s] of sellers Control over price: None Products: Identical (Agricultural & fishery) P erfect C ompetition M ono polistic Competit ion Oligopoly Pure Monopoly Control over Price Most Competitive Mon opolistic Competition Perfect Competition DART Price Taker Blue Jeans Barber Shops Beauty Shops Reebok [undifferentiated] Duopoly

4. The“invisible hand” is omnipotent.

5. Many

6. four market structures.1. Characteristics of the four market structures. [monopoly, oligopoly, monopolistic competition, & perfect competition] four types of monopolies2. Know the four types of monopolies. [Government, Natural, Technology, and Geographic] collusionprice leadership3. Know the difference between collusion and price leadership. negativepositive4. Know the difference between negative and positive externalities. 5. Summarize anti-trust legislation and review the circumstances surrounding the Justice Dept. case against Microsoft.

7. Market Structure Vocabulary

8. U.S. States Sue Big Music over Price-Fixing price-fixing lawsuit5 major recording labels This price-fixing lawsuit against the 5 major recording labels increased the price of CDs charged that they increased the price of CDs in violation of tens of millions antitrust laws. “Because of these conspiracies, tens of millions of consumers paid inflated prices to buy CDs consumers paid inflated prices to buy CDs of artists including Santana, Whitney Houston, Madonna and Eric Clapton.” The FTC 40 billion estimated that the recording companies policies[$40 billion industry] $480 million more forced U.S. consumers to pay as much as $480 million more than they should have for CDs and other music over the last three years. Auto body shops Auto body shops sued paint companies, including Sherwin-Williams, for fixing prices on paint, primer and fillers. Four major toy manufacturers Four major toy manufacturers (Hasbro, Little Tykes, Mattel, & Toys R’Us) fix pricesToys R’Us were sued for conspiring to fix prices of toys. Toys R’Us was accused illegal agreement of brokering an illegal agreement with toy manufacturers to not sell their most popular productswarehouse clubs their most popular products to the warehouse clubs.

9. 245 ads per day The average child sees 245 ads per day. They 30,000 commercials in 1 year see around 30,000 commercials in 1 year. By age 3 mil. commercials 65, on average, we see 3 mil. commercials, which 3 years of non-stop commercials is like watching 3 years of non-stop commercials. 1.4 1.6 4.0

10. 4 Competition economic rivalry 4 Competition – economic rivalry among businesses. 5 Market Structure degree of competition 5 Market Structure – degree of competition among firms operating in the same market (autos). Perfect C ompetition undifferentiated products 3 Perfect C ompetition – has a very large number of sellers (hundreds or thousands) of the same product (any agriculture or fishery product). They are all selling the same undifferentiated products (oranges).

11. Four Market Conditions Necessary For Perfect Competition 6Alarge 6A 1. Very large number of sellers (hundreds or thousands). Each seller will have only a small share of the market. B identical B 2. Similar or identical products (sweet corn/brocolli/eggs) which means there is no reason for non-price competition. C Easy C 3. Easy entry and exit into the market. DAbsence D 4. Absence of price controls ( too many sellers & consumers ). Perfect Competition and Price No one firm controls price No one firm controls price. Lowering price would lower profits as consumers would buy similar substitutes. Prices are set by the market rather “price takers.” than by the firms. These firms are “price takers.”

12. 20 Monopolistic Competition 25-75 differentiationreal or imaginary most common market structure 20 Monopolistic Competition – fairly large number (25-75) of sellers competing to sell slightly differentiated products. Product differentiation (real or imaginary) is vital. This is the most common market structure. decrease competition Sellers try to decrease competition by making their products different from the others. Since each firm product unique, attempts to make its product unique, unique “element of monopoly”, unique, there is an “element of monopoly”, monopolistic competition t hus monopolistic competition. Product differentiation Product differentiation, when it is successful, enables “establish a kind of monopoly” a firm to “establish a kind of monopoly” so that loyal customers will prefer it rather than buy from the monopolize a small portion competition. [They try to monopolize a small portion of the market.]

13. 21differentiated 21 Even virtually identical products may be differentiated by brand name, packaging,design by brand name, packaging, or design but they are still similar similar. They have all the conditions of perfect competition “differentiation.” except for product “differentiation.” 22“nonprice” 22 They use “nonprice” methods of competition such as advertisingimproved service advertising and improved service to increase sales. Reputation Reputation is important [builds loyalty]. Most manufactured goods are made by only a few producers.

14. Market Conditions F or Monopolistic Competition 4 Market Conditions F or Monopolistic Competition 1.25-75 buyers 1.25-75 buyers and sellers must exist. Firms act independently but no single firm is large enough to change the supply or price of a good. similarproduct 2. The products are similar but they emphasize product differentiation differentiation (differences among products). This is the one separates monopolistic competition from perfect thing that separates monopolistic competition from perfect competition competition. differences may be real imaginary The differences may be real or imaginary ( a refrigerator with Aspirin plastic or metal trays). Aspirin, by federal law, has to have certain chemicals but people believe highly advertised aspirin Revlon157 shades of lipstick41pink is better. Revlon offers 157 shades of lipstick – 41 are pink. Buyers must be well informed about differences 3. Buyers must be well informed about differences in products. informative and competitive Monopolistic competitors rely on informative and competitiveadvertising. Easy to enter or exit 4. Easy to enter or exit the industry. Few restrictions exist.

15. Monopolistic Competition Monopolistic Competition [element of monopoly [differentiation uniqueness] so called monopolistic competition] This is the most common market structure – over 99% of all firms. Examples of Monopolistic Competition Blue JeansGrocery StoresCandy Bars Dry CleanersRock ConcertsPizza Shoe StoresCassette playersChicken ToothpasteBook StoresSoaps and detergents RestaurantsVacuum CleanersFurniture Stores BarbershopsBeauty ParlorsEcon Textbook Co’s “Econ,Econ” “Econ”

16. Other Monopolistic Competition Examples Janitorial ServicesPest Control Air ConditioningAlcohol Treatment Centers Auto DealersCarpet Cleaning KarateFingernail Saloons Body ShopsUpholstery Cleaners Pet ShopsTire Companies Electrical ContractorsMasonry Contractors Window CleanersDry Wall Contractors DermatologistsParty Suppliers Copying Dog Grooming LocksmithsAccountants

17. Monopolistic Competition and Price 23 some control differentiationcreates buyer loyalty Non-price competition increase is too much buyers will switch Monopolistic Competition and Price 23 There is some control over price because differentiation creates buyer loyalty [jeans]. Non-price competition is used to control price. Developing brand name loyalty will enable a firm to marginally increase price without losing customers. If the increase is too much, buyers will switch to a competitor’s product. The “Real World” “real world” The “real world” of competition involves monopolistic competition99% monopolistic competition & oligopolies. Over 99% monopolistic competitors of all firms are monopolistic competitors. However, few thousand oligopolies a few thousand oligopolies produce most of the products in the U.S. So, our big firms are oligopolists smaller firms are monopolistic competitors and our smaller firms are monopolistic competitors.

18. Oligopoly “the chosen few” 24 Oligopoly – “the chosen few” (3 or 4) firms control 70% of the market. Monopoly Monopoly – 1 firm industry (Cable TV) Duopoly Duopoly – 2 firm industry. (Coke & Pepsi) [P&G (47%) & Kim-Clark (30%) in diapers] “Oligo” “Oligo” – few in an industry. (“Big 3 or 4” or even “Big 5 or 6”) Two Types of Oligopolies Pure 25 Pure (Undifferentiated) Oligopoly – 3 or 4 producers identical product dominate the production of an identical product (steel, zinc, copper, aluminum, lead, cement, industrial alcohol) Differentiated Differentiated Oligopoly – 3 or 4 producers dominate the differentiated (similar) products production of differentiated (similar) products. [typewriters, tires, soap, cigarettes, refrigerators, cereals, TVs & autos]

19. Duopoly Duopoly – when 2 firms dominate an industry. Coke Classic 1. Coke Classic 2. Pepsi Cola 3. Diet Coke 4. Mountain Dew 5. Diet Pepsi Coke products have 43 % of the market and Pepsi products have 32 %. Pepsi’s first commercial in 1939 became so popular, it became a hit record and was played in jukeboxes. A 12-ounce bottle sold for a nickel. Here it is. 6. Sprite 7. Dr. Pepper 8. Caffeine Free Diet Coke 9. Diet Dr Pepper 10. Sierra Mist

20. Oligopoly Examples Oligopoly Examples Autos Autos – “Big 3” – GM, Ford, Daimler-Chrysler-Benz Athletic Shoes Athletic Shoes–“Big 4”– Nike, Reebok, N ew B alance, Adidas, [Nike made $10 billion in 2004] Beer Beer – “Big 3” – A nheuser- B usch, Miller, & Coors Cereals Cereals – “Big 3” – Q uaker Oats, General Mills, & Kelloggs TV Networks TV Networks – “Big 4” – NBC, CBS, ABC & Fox There are also oligopolies in chewing gum, light bulbs, typewriters, photocopiers, and sewing machines. Shox Shox is Nike’s latest hot seller. I t is modeled on a 10,000 year old sandal discovered in an Oregon cave. Market Share of Phone Sales Nokia 34% Siemens 7% Motorola 16% L.G.T elecom 7% Samsung 11% Sony 6% Big 3 Subscribers[mil.] AT&T AT&TWireless VerizonWireless SprintNextel 51.6 M 47.4 M 40.4 M

21. A nd W ho I s Winning T he Sneaker W ars ? 1.Nike 36.4 % 2.Reebok 12.5 % 3.New Balance 10.9 % 4.Adidas 9.1 %

22. Four Market Conditions For Oligopolies few sellers control over 70% identical or differentiated Advertising Product informationeasily available informative advertisement huge barriers to entry three major barrierstechnological knowledge, money, & brand name loyalty $3 billion subcompacts Entrydifficultpatents Four Market Conditions For Oligopolies 1. A few sellers control over 70% of market. 2. Firms offer identical or differentiated products (real or imaginary). Advertising important. 3. Product information must be easily available. They use informative advertisement (price, quality, and special features) to introduce new products. 4. There are huge barriers to entry into the industry. The three major barriers are technological knowledge, money, & brand name loyalty. In 1980, it cost Ford $3 billion to equip a factory that would produce two new subcompacts. Entry is difficult because many have patents or own essential raw materials. This makes it difficult for new firms to try to compete. Oligopoly and Price control price to some degreecreating Oligopolies control price to some degree by creating brand name loyaltynon-price competition brand name loyalty and using non-price competition.

23. Collusion formal price agreement 27 Collusion – a formal price agreement among competitors. illegal This is illegal because it presents a danger to free competition. email illegal Even one email from one manager to another is illegal. Price Leadership one firmlargest 26 Price Leadership – when one firm, usually the largest most powerfuloffers a new product and most powerful in the industry, offers a new product at a certain price certain price. The others then follow because they fear a price war or because they would be better off financially by doing so. “follow the leader”. In other words, oligopolists play the game, “follow the leader”. legalunlike collusion Price leadership is legal (unlike collusion) because it does not involve any agreement among competitors. If the competition does not follow the leader’s price, the leading firm may be forced to change its price and fall in line with the prices of the competition.

24. Price-fixing In 1996, Archer Daniels Midland Company, one of the country’s most influential corporations, guilty to criminal price-fixing pleaded guilty to criminal price-fixing charges fined $100 million and was fined $100 million. That fine was by largest ever far the largest ever obtained by the Justice Department in a price-fixing case. The charge Archer Danielsconspired to fix the was that Archer Daniels conspired to fix the prices of lysinefeed additive prices of lysine, a feed additive, and citric acid, used in a number of food products.

25. Price-Fixing Fines Vitamin Makers Hoffman La Roche40%$500 million fine BASF AG20%$225 million fine Rhone-Paulene15%Spilled the beans on co-conspirators $725 millionmassive Both had to pay a total fine of $725 million because of massive price-fixingbreakfast price-fixing that inflated the cost of everything from breakfast cereal to hamburgers cereal to hamburgers over the past decade. The suits were livestock farmers brought by livestock farmers and other purchasers of bulk pay illegally inflated vitamins who allege they were forced to pay illegally inflated pricesvitamin, prices. It hurt every American consumer who took a vitamin, drank a glass of milk, or had a bowl of cereal drank a glass of milk, or had a bowl of cereal.

26. What was the result of the MIT 1993 Price-Fixing Case? Eight Ivy League schools agreed stop colluding to stop colluding to fix prices, and MIT was found guilty of price fixing.

27. Monopoly – the “power of one” Monopoly [mono(1) poly (seller)] C ontrol over price: Total Product: unique Ex: Comcast Cable TV T echnological M onopoly “Patent” Ex: Rubik’s Cube Government Monopoly Owned & operated by G Ex: U.S. Mail State Highways Natural Monopoly Competition would be chaotic. It is natural to give it to one co. Ex: Utilities Cable TV Geographic Monopoly Only seller in a specific area Example: Remote Store PalmTran “Price Makers” GreyhoundSRCHS Basic Cable Rate Cable TV WasteManagement TXU U.S.Mail Rubik’sRubik’sCubeCubeRubik’sRubik’sCubeCube DART

28. Pure Monopoly one firm 7 Pure Monopoly – one firm industry [“monopolist”] Pure Monopoly’s Market Condition One firmonly seller 1. One firm is the only seller. Advertising promotes image. No close substitute 2. No close substitute goods are available. Prohibitivebarriers to entryHigh invest- 8 3. Prohibitive barriers to entry in the industry. High invest- ment coststechnological expertise ment costs and technological expertise prevent others from Legal restrictions entering the market. Legal restrictions make entry in government-supported monopolies nearly impossible. complete controlprice 4. Almost complete control of market price. much 9 Monopolist have much control over price because they are only sellerhigher price would hurt demandstate the only seller. A higher price would hurt demand. The state may control the price on some legal monopolies may control the price on some legal monopolies. These single makers suppliers are “price makers.”

29. Four Types of Legal Monopolies Natural Monopoly 11 1. Natural Monopoly – where competition would be chaoticnatural chaotic, it is natural to give the business to one firm. Imagine 5 different busses the confusion if 5 different busses raced each other to the corner to pick up a passenger. Competition impractical, inconvenientunworkable would be impractical, inconvenient, & unworkable. Public Utilitiesprivately 12 Examples: Public Utilities (electric & gas) – privately owned buses companies (buses -Continental Trailways) but regulated by the governmentCable TV government. Comcast Cable TV in Plano. The government monitors the natural monopolies monitors the natural monopolies to ensure that they provide quality service at reasonable rates. AT&T AT&T had a long-distance telephone natural monopoly for 75 years. Waste Management TXU Electric Greyhound

30. Ex’s are utility companies and cable TV Market where average costs are lowest when all output is produced by a single firm Natural Monopoly Where competition would be chaotic, therefore, it is natural to give the business to one firm They are privately owned, but regulated by the government

31. Government Monopoly 13 Government Monopoly – monopoly owned and operated by the government. natural [privately owned] The difference between natural [privately owned] government monopolies [government owned & government monopolies [government owned] is owned operated by any that these monopolies are owned operated by any level of government. interstate highway system, Examples would be interstate highway system, public libraries, public schools, Postal Service, & DART public libraries, public schools, Postal Service, & DART. In most cases, government monopolies deal with economic products needed for the public welfare but which people would not be provided adequately provide goods that by private industry. Most tend to provide goods that enhance the general welfare rather than seek profits enhance the general welfare rather than seek profits. Dart Pilot Point High [Local G] State G Federal G

32. Examples of Government Monopoly The G o vernment has control over:The G o vernment has control over: U.S. Mail, U.S. Mail, State highways, andState highways, and Public schools Public schools BryanAdams Another mugging at Bryan Adams

33. 14Geographic Monopoly 14Geographic Monopoly – when a firm is the only seller of a good in a specific location.

34. “Last Chance Gas Station” The “Last Chance Gas Station” is the last one within general Store 50 miles of Mexico. A general Store in a remote area can’t community has a monopoly because the area can’t support two storesnot support two stores. Geographic monopolies are not guaranteed. guaranteed.

35. Examples of Geographic Monopoly “Last Chance Gas Station” A general store in the middle of nowhere Last Chance Gas

36. Technological Monopoly 14 4. Technological Monopoly – results from the inventionnew productpatent invention of a new product (patent) or when technology changes the way a good is produced. General Dynamics General Dynamics is the only defense contractor Trident Submarines with the technology to build Trident Submarines. patent 16 A patent gives an individual or firm exclusive right to pro- duce, use or dispose of an invention or discovery for 20 years 20 years from the date of filing. obtain a patent To obtain a patent, you must go to the Patent research Office after doing research to make sure the patent has not already been patented. Then patent lawyer You hire a patent lawyer to file your patent. 18 months All of this takes about 18 months. The total cost for a patent$5,000 cost for a patent runs about $5,000. very expensivepatent 17 It is very expensive to wage a patent infringement suit$300,000. infringement suit, around $300,000. Polaroid’s camera patent patent prevailed $929 million & won $929 million. Polaroid had accused Kodak of infringing 7 instant photo on 7 instant photo patents10 patents & it took 10 years years to make it to the Supreme Court.

37. Fiscal Year Fiscal YearApplications Filed 1985 116,427 1986 121,611 1987 126,407 1988 137,069 1989 151,331 1990 163,571 1991 167,715 1992 172,539 1993 174,553 1994 186,123 1995 221,304 1996 191,116 1997 220,773 1998 240,090 1999 261,041 2000 293,244 2001 326,081 2002 333,688 2003 333,452 2004 355,527 2005 384,228 Patents Filed Each Year Why didn’t I think of that?

38. Top 20 Patent Recipients in 2006 1.3,621IBM16. 896Korninklijke 2.2,451Samsung17. 890Infineon Tech 3.2,366Canon18. 880TI 4.2,229Matsushita19. 854Siemens 5.2,110Hewlett-Packard20. 778 Honda 6.1,959Intel 7.1,771Sony 8.1,732Hitachi 9.1,672Toshiba 10.1,610Micron Tech 11.1,487Fujitsu 12.1,463Microsoft 13.1,200 Seiko 14.1,051GE 15.906Fuji Photo Company PatentsCompany

39. Some Sad News Today About The Pillsbury Doughboy great icon of the entertainment communityA great icon of the entertainment community has died today Pillsbury Doughboy at age 71, the Pillsbury Doughboy. died yesterday of a yeast infectionHe died yesterday of a yeast infection and complications from repeated pokes in the belly. buried in a lightly greased coffin Mrs. ButterworthHungry JackCalifornia RaisinsBetty CrockerHostess Twinkies Captain CrunchDoughboy was buried in a lightly greased coffin. Dozens of celebrities turned out to pay their respects, including Mrs. Butterworth, Hungry Jack, the California Raisins, Betty Crocker, the Hostess Twinkies, and Captain Crunch. gravesite was piled high with floursAunt JemimaThe gravesite was piled high with flours. Aunt Jemima delivered the eulogy and lovingly described Doughboy as a man who never knew how much he was kneaded. later life was filled with turnoversnot considered a very smart cookie half-baked schemes crusty old manDoughboy rose quickly in show business, but his later life was filled with turnovers. He was not considered a very smart cookie, wasting much of his dough on half-baked schemes. Despite being a little flaky at times he still, as a crusty old man, was considered a roll model for millions. Play DoughJohn DoughJane Dough Pop TartDoughboy is survived by his wife, Play Dough; two children, John Dough and Jane Dough; plus they had one in the oven. He is also survived by his elderly dad, Pop Tart.

40. 18 Copyright 18 Copyright – gives the author or artist the publishsellproduce exclusive right to publish, sell or produce his work for his life + 50 years. So, copyrights protect written works of art. Top-Earning Dead Celebrities 1. Kurt Cobain$508. Ray Charles$10 2. Elvis Presley$429. Marilyn Monroe $8 3. Charles Schulz$3510. Johnny Cash $8 4. John Lennon$2411. J.R.R. Tolkien $7 5. Albert Einstein$2012. G eorge H arrison $7 6. Andy Warhol$1913. Bob Marley $7 7. T heodor G eisel (Dr. Seuss) $1014. Jerry Garcia $5

41. Practice Quiz [What kind of monopoly do the following have?] A. Natural B. Government C. Geographic D. Technological Practice Quiz [What kind of monopoly do the following have?] A. Natural B. Government C. Geographic D. Technological ___ 1. Rubik’s Cube ___ 2. Comcast Cable TV in West Boca ___ 3. Florida Gas ___ 4. The “Last Chance Gas Station” ___ 5. SR High School ___ 6. Constructing a state highway between Naples and Tampa ___ 7. Nike’s combo athletic shoe & one-wheel skate ___ 8. Only one man living in an isolated Trailer Park with 50 women

42. Monopoly Quiz A. Natural B. Technological C. Government D. Geographic 1. Palmtran – bus service (supported by taxes) 2. Postal Service (U.S. mail) 3. Boca High School 4. Construction on a state highway (supported by gasoline taxes) 5. Comcast Cable TV in Plano 6. FPL Electric (privately owned) 7. Waste Management (privately owned) 8. Bell Helicopter producing patented V-22 Osprey 9. Polaroid Instamatic (patent) 10. Remote Drugstore in Podunk, FL “Privately owned” “Remote store”

43. Competition and the Market Structure

44. Price Control and the Market Structure Most control over price Least control over price

45. Very Many Cable TV Water Agric. products Fishery Some Fair Amount Fair amount with differentiated oligopolies Extensive

46. Antitrust Legislation Since the 1880s, the federal government had aided competition. To promote certain legal monopoliesallowed to exist efficiency, certain legal monopolies have been allowed to exist. Trustslegally formed combinations Trusts – legally formed combinations of corporations or companies. cutthroat competitionmergers In the latter half of the 1800s, cutthroat competition and mergers created trusts cartels in steel, meatpacking, oil, sugar, coal, and tobacco. They were actually large cartels. government passed laws to protect competition By the 1880s, the government passed laws to protect competition. Anti-trust legislation monitor and regulate big business Anti-trust legislation – designed to monitor and regulate big business, prevent monopoliesbreak up existing monopolies prevent monopolies and break up existing monopolies. Interstate Commerce Act-1887 ICC 1. Interstate Commerce Act-1887 – created the ICC to oversee railroad regulates railroadsmotor vehicles freight carriers rates. Today it regulates railroads, motor vehicles, & other freight carriers. Sherman Anti-trust Act-1890 “cornerstone of anti-trust legislation.” 2. Sherman Anti-trust Act-1890 – the “cornerstone of anti-trust legislation.” prohibited any agreementscontracts or conspiracies It prohibited any agreements, contracts or conspiracies that would restrain interstate tradecause monopolies to formprotected trade restrain interstate trade or cause monopolies to form. This act protected trade against unlawful restraint & monopoly1 st significant act against against unlawful restraint & monopoly. It was the 1 st significant act against monopolies monopolies. Later legislation defines the principles in this act. failure to define key terms“trusts” The Sherman Anti-trust’s failure to define key terms such as “trusts” and “restraintof trade”somewhat ineffective “restraint of trade” made it somewhat ineffective. It was not clear what was legal or illegal legal or illegal. This act also ran contrary to the economic theory of laissez-faire hands-offattitude of the past 100 years laissez-faire (hands-off by the government) attitude of the past 100 years. 28 29 30

47. Senator John Sherman

48. And What About Microsoft? Should They Be Broken Up Into The “Baby Bills”? Microsoft was accused of forcing computer makers to install its browser [Internet Explorer] as a condition of licensing Windows.

49. Economies of Scale 31. Economies of Scale [“economies of mass production”] Exist when firms are large enough to take advantage of mass production techniques. Or, “Why it may cost only a little more to produce twice as much.” Fixed cost don’t change Variable costs may not change much if workers were under- worked and the oven was not being used to capacity.

50. The End

51. Economics Economics (college) Textbook Companies (over 50 of these and they are differentiated Blue Jean Blue Jean Companies (dozens and differentiated) Black eyed peas One seller Easiest to enter Very many Very many (100’s) sellers Price takers Manysellers Many [25-75] sellers Price Maker Beauty Shop few control 70% A few control 70% of the market Nat Geog Natural, Geographic, Tech & Gov. Tech nological, & Gov. Nike, Reebok, New Balance Adidas Balance, and Adidas Homogeneous prod uct [Identical] Identicalor Identical (pure) or differentiated differentiated products Comcast Cable TV Price Leadership is used Polaroid Instamatic McDonald’s, Wendy’s, Burger King and Burger King Product differ entiation gives an element of monopoly Oligopoly 1._______________________ 2._______________________ 3._______________________ 4._______________________ 5._______________________ Perfect Competition 1._______________________ 2._______________________ 3._______________________ 4._______________________ 5._______________________ Pure Monopoly 1._______________________ 2._______________________ 3._______________________ 4._______________________ 5._______________________ M onopolistic C ompetition 1._______________________ 2._______________________ 3._______________________ 4._______________________ 5._______________________ Market Structure Word Scramble [From the word scramble below, pick out the 5 correct answers for each market structure] * bold face type. * Write the bold face type. Name 1. ________________ Name 2.________________

52. Oligopoly 1. Few control 70% 2. N ike, Reebok, N.Bal., & Adidas 3. Identical or differentiated 4. Price Leadership 5. M c D ’s, W endy’s, & Burger King. Perfect Competition 1. Easiest to enter 2. Homogeneous product 3. Very many sellers 4. Price Takers 5. Black eyed peas Pure Monopoly 1. Nat, Geog, Tech, & Gov. 2. Polaroid Instamatic 3. One seller 4. Comcast Cable TV 5. Price Maker Monopolistic Competition 1. Product differentiation 2. Many sellers 3. Econ Textbook Co’s 4. Blue jean companies 5. Beauty Shop Economics Economics (college) Textbook Companies (over 50 of these and they are differentiated Blue Jean Blue Jean Companies (dozens and differentiated) Black eyed peas One seller Easiest to enter Very many Very many (100’s) sellers Price takers Manysellers Many [25-75] sellers Price Maker Beauty Shop few control 70% A few control 70% of the market Nat Geog Natural, Geographic, Tech & Gov. Tech nological, & Gov. Nike, Reebok, New Balance Adidas Balance, and Adidas Homogeneous prod uct [Identical] Identicalor Identical (pure) or differentiated differentiated products Comcast Cable TV Price Leadership is used Polaroid Instamatic McDonald’s, Wendy’s, Burger King and Burger King Product differ entiation gives an element of monopoly Market Structure Word Scramble [From the word scramble below, pick out the 5 correct answers for each market structure] * bold face type. * Write the bold face type. Name 1. ________________ Name 2.________________Answers