Competition & Monopolies, Lesson 4

313 views

Published on

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

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
313
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • page 151
  • Competition & Monopolies, Lesson 4

    1. 1. ChapterCompetition & MonopoPage 148
    2. 2. CompetitionBasic feature of market economicsystemADVANTAGES• Choices• Lower PricesWHY?Competing supplies leads toDo suppliers like comp
    3. 3. BUSINESSES are set up basedon # of ownersSole proprietorship, partnership &corporationalso grouped by competitionfacedOr MARKET STRUCTURE
    4. 4. 4 BASIC MARKETSTRUCTURESFig. 37 p. 149Perfect CompetitionMonopolisticCompetitionOligopoly
    5. 5. Perfect CompetitionMonopolisticCompetitionOligopolyMonopolyMARKET STRUCTURE2 are rare2 are common??RARERARE - pure
    6. 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. 7. Perfectcompetitionalso knownasPURE competitionRequires 7conditions to be met
    8. 8. 1. A largemarketNUMEROUS buyers/sellers forproduct
    9. 9. 2. similar/nearly identicgood/service
    10. 10. 3. easyEntry & ExitSellers in market can’t prevent competition ORentranceSmall initial investmentGood/service is easy to produce
    11. 11. 4.info- easy to getEASY for buyers/sellers – infoaboutprices / quality / supply
    12. 12. 5.independencePossibility of sellers/buyers controllingprices
    13. 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. 14. 7. informationAbout PRICES, QUALITY & SUPPLY SOURCESTODAYit’s easy to find lowest pricTRUE Perfect CompetitionisRAR
    15. 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. 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. 17. upcomingMonopoly, Oligopoly, Monopolisticcompetition &monopolies

    ×