BellringerBellringer1. How many players can win 1. How many players can win

the game “Monopoly”?the game “Monopoly”?No we won’t be playing it in No we won’t be playing it in

this class.this class.2.2. How many How many suppliers sell sell

lunch here at Pueblo?lunch here at Pueblo?3.3. How would things change How would things change

if TUSD allowed multiple if TUSD allowed multiple sellers during lunch?sellers during lunch?

Cornell notes topic:

Monopolies

4 Market Structures4 Market Structures

MonopolyMonopolyMonopolistic CompetitionMonopolistic CompetitionPerfect CompetitionPerfect CompetitionOligopolyOligopoly

MonopolyMonopoly A market for a A market for a

good/service with good/service with oneone dominate sellerdominate seller

Firm has Firm has totaltotal “pricing “pricing power”power”

Has extremely high Has extremely high entry costs, OR entry costs, OR impossibleimpossible

Types of surplusTypes of surplus Consumer surplusConsumer surplus: difference between budget and : difference between budget and

actual priceactual price

Producer surplusProducer surplus: difference between cost and price : difference between cost and price (really just profit)(really just profit)

Budget:$50

Actual:$40

Monopoly MarketsMonopoly Markets

Price DiscriminationPrice DiscriminationThink/Pair/Share

Examples?Senior discountStudent discountEbay

Santa Barbara, CASanta Barbara, CA

ArgentinaArgentina

Types of MonopolyTypes of Monopoly GeographicGeographic Only firm in a Only firm in a

certain areacertain area FencesFences Small townsSmall towns Other Other

example?example? Draw PEST Draw PEST

change on change on boardboard

Types of MonopolyTypes of Monopoly

GovernmentGovernment Granted by the Granted by the

governmentgovernment ““public goods”public goods” Reasoning?Reasoning?

Types of MonopolyTypes of Monopoly

TechnologicalTechnological Due to Due to

technologytechnology (Patents)(Patents) (Copyrights)(Copyrights) Software, Software,

biotechnology, biotechnology, artisticartistic

Reasoning?Reasoning? examplesexamples

In your notes,In your notes,Name the type of monopolyName the type of monopoly

1.Popcorn at Harkins movie theater1.Popcorn at Harkins movie theater

2. Fernando invents new toy for children2. Fernando invents new toy for children

3. Interstate Highways like I-10 3. Interstate Highways like I-10

4. The only mechanic in a small town4. The only mechanic in a small town

5. School lunches at Pueblo5. School lunches at Pueblo

6. Snacks in certain Pueblo classrooms6. Snacks in certain Pueblo classrooms

7. Secret recipe for gatorade7. Secret recipe for gatorade

8. US military8. US military

9. Tucson Water Company9. Tucson Water Company

10. Expensive soda at a baseball game10. Expensive soda at a baseball game

Closure questionsClosure questions

4. Why do economists worry about 4. Why do economists worry about monopolies? (hint: think about prices)monopolies? (hint: think about prices)

5. Why are technological monopolies allowed 5. Why are technological monopolies allowed to exist? (think about creative businesses)to exist? (think about creative businesses)

6. Do you think government monopolies are 6. Do you think government monopolies are always positive for consumers? (consider always positive for consumers? (consider our school lunches, or the AZ MVD)our school lunches, or the AZ MVD)

Min Wage reading Min Wage reading questionsquestions

1.1. Graph paragraph #2Graph paragraph #2

2.2. How do employers react to min. wage increase? (pg How do employers react to min. wage increase? (pg 3-4)3-4)

3.3. How does the author think employees will to react to How does the author think employees will to react to getting the low skilled jobs? (pg 6-7)getting the low skilled jobs? (pg 6-7)

4.4. Would the author support reducing the minimum Would the author support reducing the minimum wage for people aged 15-20?wage for people aged 15-20?

5.5. Using your S/D graph, describe of 2 benefits to the Using your S/D graph, describe of 2 benefits to the economy if the minimum wage was reduced for economy if the minimum wage was reduced for people aged 15-20.people aged 15-20.