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Market Structures and Price-Output Determination.pptx
- 1. Market Structures andPrice-Output Determination O R F I A N O, J H O N P H AU L I O E L P.
- 2.
- 4. PURE COMPETITION • Amarket with many sellers offering identical products, where no single firm can influence the price.
- 5. • AGRICULTURAL MARKETS •Selling identical crops (corn, eggplant, rice, etc.) • STOCK MARKETS • Buy and Sell of companies (sm, Robinsons, ayala etc) • FOREIGN EXCHANGE MARKET • People exchange money (peso to dollars, yen to euros) • ONLINE MARKETPLACE • Each sellers sells the same products in different online platforms (shoppee, temu, tiktok, ebay etc.)
- 7. MONOPOLY • A marketdominated by a single seller with no close substitutes.
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- 11. MONOPOLISTIC COMPETITION • Amarket with many sellers offering similar but differentiated products.
- 15. OLIGOPOLY • A marketdominated by a few large firms, often interdependent in pricing and output decisions.
- 16. • AIRLINES • Fewmajor airlines control large portion of air travel • MOBILE PHONE PROVIDERS • Small number of companies per country • AUTOMOBILE INDUSTRY • Few manufaturers a portion of global car market • TECHNOLOGY INDUSTRY • Apple Samsung Google & Microsoft hold dominant positions in various technology sectors
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- 18. DETERMINANTS OF MARKETSTRUCTURE
- 20. NUMBER OF SELLERS T H EM O R E S E L L E R S T H E R E A R E , T H E S T RO N G E R T H E C O M P E T I T I O N.
- 21. NATURE OF PRODUCT P R OD U C T S C A N B E E I T H E R I D E N T I C A L ( H O M O G E N E O U S ) O R U N I Q U E ( D I F F E R E N T I A T E D ) .
- 22. BARRIERS TO ENTRY •Some industries require licenses, capital, or special technology to enter.
- 23. CONTROL OVER PRICE •Sellers in competitive markets are price takers; in monopolies or oligopolies, they are price makers.
- 24. GOVERNMENT REGULATION • Lawsand policies can limit or encourage competition.
- 25. ECONOMIES OF SCALE •Big companies can produce more at lower costs, gaining competitive advantage.
- 26. PRICE AND OUTPUTDETERMINATION
- 27. PURE COMPETITION • Pricesare dictated by overall market supply and demand. • Firms produce where Marginal Revenue equals Marginal Cost (MR = MC). • In the long run, only normal profits are earned due to free entry and exit. • Example: A tomato farmer adjusts output to match prevailing market prices. “Bida ang Palengke”
- 28. MONOPOLY • The firmsets prices based on consumer demand—it is the sole seller. • Output is produced at MR = MC, but prices exceed marginal cost. • Can earn sustained supernormal profits due to barriers to entry. • Example: Meralco adjusts electricity prices based on demand and cost factors. “Hari ng Merkado”
- 29. MONOPOLISTIC • Firms havepricing power because of product differentiation. • Output is decided where MR = MC, considering branding and loyalty. • Long-run profits normalize as new firms enter the market. • Example: A milk tea shop prices creatively based on its unique appeal. “Milk tea Wars!”
- 30. OLIGOPOLY • Prices mayremain rigid due to mutual dependence among few firms. • Output decisions are strategic, using models like Cournot or kinked demand. • Firms may maintain profits through collusion or strong differentiation. • Example: Globe and PLDT avoid price wars by offering differentiated services. “Nagbabantayan ang mga higante.”
- 31. Comparison Table Market TypePrice Control Output Rule Long-Term Profit Perfect Competition None (market sets) MR = MC Normal profit Monopoly Full control MR = MC Supernormal profit Monopolistic Competition Some control MR = MC Normal profit Oligopoly Strategic control Depends on model Sustained profit
Editor's Notes
- #4 Characteristics: Large number of buyers and sellers Homogeneous products Free entry and exit Perfect information Firms are price takers
- #5 🌾 1. Agricultural Markets What’s happening? Lots of farmers grow the same kinds of crops—like rice, corn, or tomatoes. Why it’s “perfect competition”? Everyone sells basically the same thing, so buyers just pick the cheapest. No farmer can raise prices much because there’s so much competition. 📈 2. Stock Markets What’s happening? People buy and sell shares of companies, like SM or Ayala. Why it’s “perfect competition”? There are tons of buyers and sellers, so prices change quickly depending on supply and demand. No single person or group can control it. 💱 3. Foreign Exchange Markets What’s happening? People and banks exchange money—like pesos to dollars or yen to euros. Why it’s “perfect competition”? Everyone sees the same prices, the currency itself is the same everywhere, and there are lots of participants keeping the rates fair. 🛍️ 4. Online Marketplaces What’s happening? Sites like Shopee, Lazada, or eBay let people sell similar things—like phone cases, clothes, or trinkets. Why it’s “close to perfect competition”? Buyers can easily compare prices and switch sellers. If one seller prices too high, others will win the sale.
- #7 Characteristics: One firm controls the entire market High barriers to entry Price maker No competition
- #8 Characteristics: Large number of buyers and sellers Homogeneous products Free entry and exit Perfect information Firms are price takers
- #9 Characteristics: Large number of buyers and sellers Homogeneous products Free entry and exit Perfect information Firms are price takers
- #11 Characteristics: Many firms Product differentiation Some control over price Low barriers to entry
- #12 Characteristics: Large number of buyers and sellers Homogeneous products Free entry and exit Perfect information Firms are price takers
- #15 Characteristics: Few sellers High barriers to entry Products may be homogeneous or differentiated Strategic behavior (e.g., price wars, collusion) The Philippine telecom industry (PLDT, Globe, DITO). These firms influence each other’s pricing and service offerings.
- #16 These are great examples of oligopoly, Joey—and let’s unpack each one in simple, relatable terms: 🛫 Airlines A few big airlines fly most of the major routes. Think PAL, Cebu Pacific, and AirAsia in the Philippines. You don’t have tons of choices for long-distance flights, and prices often stay close together. These airlines sometimes match each other’s promos or avoid undercutting each other too much. 📱 Mobile Phone Providers Only a few telcos provide signal and data—like Globe, Smart, and DITO. They have lots of customers, high infrastructure costs, and the ability to influence prices and plans. You’ll notice similarities in their promos or pricing because they watch each other closely. 🚗 Automobile Industry Globally, companies like Toyota, Ford, and Honda dominate car manufacturing. Even though there are many brands, the biggest ones control most of the market. They compete on price, design, and features—but rarely drop prices too low to avoid price wars. 💻 Technology Industry Tech giants like Apple, Google, and Microsoft dominate computers, phones, and software. Their products are widely used and hard to avoid—imagine trying to use a computer without Windows or Google! They innovate a lot, but also keep an eye on each other’s moves to protect market share. In oligopoly, each big player knows their competitors well and often reacts to what the others do. It’s a game of strategy—not just price, but also branding, innovation, and customer loyalty. Would you like me to turn this into a classroom activity, infographic guide, or even translate it with a bit of Tagalog flair and Encantadia-style drama? I'm game if you are!
- #17 🔴 More Competition ← Left Side Perfect Competition: Many sellers, identical products, zero pricing power. Monopolistic Competition: Still many sellers, but products are slightly differentiated (think milk tea shops with different flavors). 🔵 More Concentration → Right Side Oligopoly: Few big players dominate the market (like telecom companies). Monopoly: One firm controls everything and can set prices freely (like a sole electricity provider).
- #21 Example: Rice looks and costs about the same; branded shampoo differs in scent, packaging, and benefits.
- #22 Starting a telecom company requires massive investment and government approval.
- #23 Example: Farmers sell at prevailing market prices; Meralco sets electricity rates.
- #24 Water services are often operated under government regulation as natural monopolies.
- #25 Cement firms dominate due to large-scale production and distribution efficiency.
- #27 🟢 Perfect Competition – “Libreng Presyo, Walang Drama” Explanation Variant: Think “open karaoke night”—everyone sings the same song (product), so there's no reason to tip anyone more. Slide Line: “Presyo ay itinakda ng merkado; producer ay taga-sunod lamang.” Filipino Twist: “Gulay sa palengke—bawat tindera ng kalabasa, halos pareho ang benta kasi pareho rin ang kalidad.”
- #28 Monopoly – “Isang Susi, Lahat ng Pinto” Explanation Variant: One seller = one decision-maker. Think “exclusive ticket seller for a concert.” Slide Line: “Kapag ikaw lang ang may produkto, ikaw rin ang may kapangyarihan sa presyo.” Classroom Skit Tip: Let someone play “Mang Tubig” who owns all the water in town—set price based on mood or need!
- #29 Monopolistic Competition – “Pakulo sa Presyo” Explanation Variant: Sellers tweak product or brand to control price. Think “halo-halo showdown”—everyone has a secret recipe. Slide Line: “Sa dami ng pagpipilian, presyong kakaiba para sa panlasang iba.” Pop Culture Pinch: Reference milk tea shops with K-drama names or “add pearls ₱10” strategies.
- #30 Oligopoly – “Kapag Gumalaw Siya, Gagalaw Rin Ako” Explanation Variant: Few sellers = strategic pricing. Like barkada restaurants near a school—when one offers “₱49 rice meals,” others follow. Slide Line: “Presyo ay resulta ng obserbahan, hindi padalos-dalos na desisyon.” Mini-Game Idea: Let students form small groups as competing telcos—simulate promo-setting and price battles!