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Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
Competition & Monopolies, Lesson 4
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Competition & Monopolies, Lesson 4

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Texas Tech Economy Chapter 9, Lesson 4, Section 1 Competition & Monopolies

Texas Tech Economy Chapter 9, Lesson 4, Section 1 Competition & Monopolies

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  • page 151
  • Transcript

    • 1. ChapterCompetition & MonopoPage 148
    • 2. CompetitionBasic feature of market economicsystemADVANTAGES• Choices• Lower PricesWHY?Competing supplies leads toDo suppliers like comp
    • 3. BUSINESSES are set up basedon # of ownersSole proprietorship, partnership &corporationalso grouped by competitionfacedOr MARKET STRUCTURE
    • 4. 4 BASIC MARKETSTRUCTURESFig. 37 p. 149Perfect CompetitionMonopolisticCompetitionOligopoly
    • 5. Perfect CompetitionMonopolisticCompetitionOligopolyMonopolyMARKET STRUCTURE2 are rare2 are common??RARERARE - pure
    • 6. All businesses competewhen others produce similargoods/services.Market with so many sellers of agood/service, each having a small shareis called…PerfectcompetitionSo many that no singlebuyer/seller can affect
    • 7. Perfectcompetitionalso knownasPURE competitionRequires 7conditions to be met
    • 8. 1. A largemarketNUMEROUS buyers/sellers forproduct
    • 9. 2. similar/nearly identicgood/service
    • 10. 3. easyEntry & ExitSellers in market can’t prevent competition ORentranceSmall initial investmentGood/service is easy to produce
    • 11. 4.info- easy to getEASY for buyers/sellers – infoaboutprices / quality / supply
    • 12. 5.independencePossibility of sellers/buyers controllingprices
    • 13. 6.NO CONTROLoverprice1st 5 conditions, price’s controlled by supply &demandNOT buyers/sellersPERFECT COMPETITION Needsmany suppliers of similar products & many informedbuyers who know market pricesMarket price = equilibrium pricein Pure CompetitioTotal supply & total demand interact to reach equilibriumBecause there are so many buyers/sellers, aperson charging more or less DOES NOT affectmarket price.
    • 14. 7. informationAbout PRICES, QUALITY & SUPPLY SOURCESTODAYit’s easy to find lowest pricTRUE Perfect CompetitionisRAR
    • 15. WHEAT MARKETas a Perfect CompetitAgricultural Market in U.S.A. – CLOSE to being PureCompetition7 conditions1. Large market1000’s of farmers producing/Wholesalers buying2. SIMILARPRODUCT3. EASY entry/exitLowrent/Learnable4.4. EASY INFO – Wheat prices on Internet5. independenceSmall chance of farmers controllingprice6. no control overpricesNO farmer has big influence on p7. uniquesituationInelastic demandsupply side of most agricultural markets is uMarket dependent on conditions over which farmers have little
    • 16. Society BenefitsIntense competition forces price down (costs +small profit)Consumers pay for what’s been put in to makeproductsOP COST of use of land, lavor, capital &entrepreneurshipPRICE paid by consumers = true signal of value of productin societyPURE competitive industries = ECONOMIC
    • 17. upcomingMonopoly, Oligopoly, Monopolisticcompetition &monopolies

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