Role of Producers & Consumers<br /> in a Market Economy<br />EPF2i. Monopolies and Collusion<br />
Monopolies & Collusion<br />Monopolies and collusion among sellers eliminate competition<br />In industries with less comp...
Essential question:<br />What is an industry?<br />3<br />
An industry is:<br />A distinct group of productive or profit-making enterprises sharing similar products or services <br ...
Essential question:<br />What are the characteristics of competitive and uncompetitive markets?<br />5<br />
Competition in Industries:<br />The level of competition in an industry is affected by :<br />the ease with which new prod...
Essential question:<br />What collusion?<br />7<br />
Collusion:<br />Is when competing firms make a secret agreement to try to control a market<br />Collusion (practiced by ca...
Essential question:<br />How are prices affected when markets are more competitive? Less competitive?<br />9<br />
Markets with Perfect Competition<br />Have many buyers with perfect information and sellers all selling identical products...
Less Competitive Markets:Monopolies & Oligopolies<br />A monopoly – has one supplier of a product. The seller here has mar...
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Epf2i monopolies and collusion

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Epf2i monopolies and collusion

  1. 1. Role of Producers & Consumers<br /> in a Market Economy<br />EPF2i. Monopolies and Collusion<br />
  2. 2. Monopolies & Collusion<br />Monopolies and collusion among sellers eliminate competition<br />In industries with less competition, prices are likely to be higher<br />2<br />
  3. 3. Essential question:<br />What is an industry?<br />3<br />
  4. 4. An industry is:<br />A distinct group of productive or profit-making enterprises sharing similar products or services <br />Ex. the automobile industry<br />4<br />
  5. 5. Essential question:<br />What are the characteristics of competitive and uncompetitive markets?<br />5<br />
  6. 6. Competition in Industries:<br />The level of competition in an industry is affected by :<br />the ease with which new producers can enter the industry<br />And by the availability, price and quantity of substitute goods and services<br />6<br />
  7. 7. Essential question:<br />What collusion?<br />7<br />
  8. 8. Collusion:<br />Is when competing firms make a secret agreement to try to control a market<br />Collusion (practiced by cartels) is illegal in the United States<br />It reduces the level of competition in a market<br />Is more difficult in markets with large numbers of buyers and sellers.<br />8<br />
  9. 9. Essential question:<br />How are prices affected when markets are more competitive? Less competitive?<br />9<br />
  10. 10. Markets with Perfect Competition<br />Have many buyers with perfect information and sellers all selling identical products<br />Sellers here have no market power – no control over the market price<br />For example, a grower of plain white rice can only sell at the market price – no one will pay more because they can get plain white rice from any supplier at that price<br />10<br />
  11. 11. Less Competitive Markets:Monopolies & Oligopolies<br />A monopoly – has one supplier of a product. The seller here has market power and can control both price and quantity.<br />An oligopoly – when there are few sellers, competition is limited, and producers are able to gain more control of the market<br />A natural monopoly - when 1 producer can supply total output in a market at a cost that is lower than when 2 or more producers divide product, competition may be impossible. In the absence of competition, govt regulations may then be used to try to control price, output and quality.<br />11<br />

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