BellringerBellringer1.1. If you went to the store to If you went to the store to

buy 1 box of staples, what buy 1 box of staples, what would be the most would be the most

important thing you’d want important thing you’d want to look for?to look for?

2.2. If you wanted to buy a new If you wanted to buy a new smartphone what would be smartphone what would be

the most important thing the most important thing you’d want to look for?you’d want to look for?

ReviewReview3. For each type of monopoly, list 3 3. For each type of monopoly, list 3

examplesexamples

Why?Why?

Can’t the paper clip firm raise their prices?Can’t the paper clip firm raise their prices?

Market Structure Poster Market Structure Poster Assignment (20 PTS)Assignment (20 PTS) Make a poster to teach other students your market model:Make a poster to teach other students your market model:

Perfect Competition Perfect Competition

OligopolyOligopoly Must include:Must include: ((2 person group maximum2 person group maximum) )

Chapter 9Chapter 9 IYOW: Market characteristics/definitionIYOW: Market characteristics/definition 4 non-text examples of firms or industries (w/pictures)4 non-text examples of firms or industries (w/pictures) Describe the competition Describe the competition (Do companies have pricing power, Does quality (Do companies have pricing power, Does quality

matter?)matter?)

How expensive to start up? How expensive to start up? (give examples of (give examples of fixed/variable costs)fixed/variable costs)

What type of labor does this industry require? What type of labor does this industry require? (skilled/unskilled, explain)(skilled/unskilled, explain)

Why positive for consumers OR producers?Why positive for consumers OR producers? How could firms be successful in industry?How could firms be successful in industry?

Monopolistic CompetitionMonopolistic Competition

Verbal BellringerVerbal BellringerYou don’t have to write this down:You don’t have to write this down:

1. Why does a firm in a monopoly market 1. Why does a firm in a monopoly market have more pricing power?have more pricing power?

Perfect

Competition

Monopolistic

CompetitionOligopoly Monopoly

CopyrightsCopyrights

Columbus Blue Jackets NHL

ReviewReview

What is “pricing power”?What is “pricing power”?

Firm’s ability to set its Firm’s ability to set its own priceown price

ReviewReview

Consumer SurplusConsumer Surplus

ReviewReview

Consumer SurplusConsumer Surplus

ReviewReview

Consumer Surplus lossConsumer Surplus loss

ReviewReview

Consumer SurplusConsumer Surplus

ReviewReview

Consumer SurplusConsumer Surplus

Perfect Competition Perfect Competition MarketMarket

Features:Features: Many firmsMany firms Nearly identical productsNearly identical products No pricing power No pricing power ““price takers”price takers” Easy to start new firmEasy to start new firm Easy to close down firmEasy to close down firm Perfectly informed Perfectly informed

consumersconsumers Costs really importantCosts really important

Other Examples?

Monopolistic Competition Monopolistic Competition MarketMarket

Features:Features: Many firmsMany firms Different or perceived different Different or perceived different

productsproducts Some pricing power Some pricing power

“price makers”“price makers” Can be easy to start new firmCan be easy to start new firm Can be easy to close down Can be easy to close down

firmfirm Not fully informed consumersNot fully informed consumers

Other Examples?

Perfect vs. Monopolistic Perfect vs. Monopolistic CompetitionCompetition

How could you contrast the two How could you contrast the two markets?markets?

Oligopoly & MonopolyOligopoly & Monopoly

How could you contrast the two How could you contrast the two markets?markets?

Draw a 4 part diagram of Draw a 4 part diagram of the market structuresthe market structures

Perfect

Competition

Monopolistic

CompetitionOligopoly Monopoly

What type of market?What type of market?

Mexican FoodMexican Food

On your BR: What type of On your BR: What type of market?market?

Blank DVD’sBlank DVD’s

What type of market?What type of market?

What type of market?What type of market?

What type of market?What type of market?

What type of market?What type of market?

Movie theaters in TucsonMovie theaters in Tucson

What type of market?What type of market?

Hair cutHair cut

What type of market?What type of market?

Broadcast TVBroadcast TV

What type of market?What type of market?

Electric PowerElectric Power

What type of market?What type of market?

HotelsHotels

What type of market?What type of market?

Notebook paperNotebook paper

Group ActivityGroup Activity Select 10 specific industries and ask Select 10 specific industries and ask

another group to identify their another group to identify their market using your notesmarket using your notes

Fill out the prices of groceries Fill out the prices of groceries individuallyindividually

Perfect

Competition

Monopolistic

CompetitionOligopoly Monopoly