Objective: Analyze the effect competition and monopolies have on a market economy
<ul><li>Is the extent to which competition prevails in particular markets </li></ul><ul><li>There are four basic structure...
<ul><li>1. Has a large market </li></ul><ul><li>2. A similar product </li></ul><ul><li>3. Easy entry and exit- means its e...
<ul><li>Is a market situation in which a single supplier makes up the entire industry </li></ul><ul><li>1. Single Seller <...
<ul><li>Is an industry dominated by a few suppliers who exercise some control over price </li></ul><ul><li>1. Domination b...
<ul><li>When a large number of sellers offer similar products in which each has some control over price </li></ul><ul><li>...
<ul><li>Sherman Antitrust Act (1890)- Made monopolies illegal and sought to break the ones already in existence  </li></ul...
<ul><li>Act like a referee to ensure businesses play fair in the market place </li></ul><ul><li>Federal Trade Commission- ...
<ul><li>What are the four basic market structures? </li></ul><ul><li>Ans. perfect competition, monopoly, oligopoly and mon...
<ul><li>What are the factors of production? </li></ul><ul><li>Ans. Land, Labor, Capital, Entrepreneurship, Technology </li...
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9 Competition And Monopolies

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9 Competition And Monopolies

  1. 1. Objective: Analyze the effect competition and monopolies have on a market economy
  2. 2. <ul><li>Is the extent to which competition prevails in particular markets </li></ul><ul><li>There are four basic structures: perfect competition, monopoly, oligopoly and monopolistic competition </li></ul>
  3. 3. <ul><li>1. Has a large market </li></ul><ul><li>2. A similar product </li></ul><ul><li>3. Easy entry and exit- means its easy to start a business and doesn’t cost a lot </li></ul><ul><li>4. Easily obtainable information- about prices, and market conditions </li></ul><ul><li>5. Independence- No control over prices </li></ul><ul><li>Benefit to society the most efficient use of resources and low prices </li></ul>
  4. 4. <ul><li>Is a market situation in which a single supplier makes up the entire industry </li></ul><ul><li>1. Single Seller </li></ul><ul><li>2. No substitutes </li></ul><ul><li>3. No entry- very difficult to start this type of business </li></ul><ul><li>4. Almost complete control over prices </li></ul>
  5. 5. <ul><li>Is an industry dominated by a few suppliers who exercise some control over price </li></ul><ul><li>1. Domination by a few sellers </li></ul><ul><li>2. Barriers to entry </li></ul><ul><li>3. Identical or slightly different products </li></ul><ul><li>4. Non-price competition </li></ul><ul><li>5. Interdependence- a change in one firm will cause the others to change </li></ul>
  6. 6. <ul><li>When a large number of sellers offer similar products in which each has some control over price </li></ul><ul><li>1. Numerous sellers </li></ul><ul><li>2. Relatively easy entry </li></ul><ul><li>3. Differentiated products </li></ul><ul><li>4. Non-price competition </li></ul><ul><li>5. Some control over price </li></ul>
  7. 7. <ul><li>Sherman Antitrust Act (1890)- Made monopolies illegal and sought to break the ones already in existence </li></ul><ul><li>Clayton Act (1914)- Strengthen the Sherman Act and continued to break up monopolies and control mergers </li></ul><ul><li>Mergers come in three different types: horizontal, vertical, and conglomerate </li></ul>
  8. 8. <ul><li>Act like a referee to ensure businesses play fair in the market place </li></ul><ul><li>Federal Trade Commission- regulates interstate commerce </li></ul><ul><li>OSHA- regulates the workplace environment to ensure a safe place to work </li></ul><ul><li>Food and Drug Administration- ensures the food and drugs you buy are safe </li></ul>
  9. 9. <ul><li>What are the four basic market structures? </li></ul><ul><li>Ans. perfect competition, monopoly, oligopoly and monopolistic competition </li></ul><ul><li>Give an example of a regulatory agency? </li></ul><ul><li>Ans. FTC, OSHA, FDA </li></ul><ul><li>What is a monopoly? </li></ul><ul><li>Ans. Is a market situation in which a single supplier makes up the entire industry </li></ul>
  10. 10. <ul><li>What are the factors of production? </li></ul><ul><li>Ans. Land, Labor, Capital, Entrepreneurship, Technology </li></ul><ul><li>What are the three basic questions of economics? </li></ul><ul><li>What goods and services should be produced </li></ul><ul><li>How should these goods and services be produced </li></ul><ul><li>Who will get the goods and services </li></ul>

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