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Warm Up

List your favorite brand for the following:


1. Jeans
2. Shampoo
3. Shoes
Explain why you like these particular
brands?

Chapter7

Competition,Market
Structures,andtheRoleof
Government

12.2.8theroleofprofitastheincentivetotheentrepreneursinamarketeconomy

MarketStructures

Whatistheprimaryaim/goalofbusinesses?
Tomaximizeprofits
Whatiscompetition?
Strivingagainstotherstoreachan
objective

4TypesofMarketStructure
1. Pure/PerfectCompetition

Largenumberofbuyersandsellers
Identicalproduct
Wellinformedbuyersandsellers

MoreCompetition

LessCompetition

Pure/PerfecctCompetition
Manybuyer/sellers+

QuickTime and a
TIFF (Uncompressed) decompressor
are needed to see this picture.

IdenticalProducts

MonopolisticCompetition
Meetsallconditionofperfectcompetitionexceptfor
identicalproducts.
Productdifferentiation

Monopolisticcompetitorsusenonpricecompetition
Advertising,giveaways,orotherpromotions

MoreCompetition

LessCompetition

MonopolisticCompetition

Gap

Levis

Lucky

Sameaspurecompetitionexceptforproductdifferentiation

MonopolisticCompetition

Aretheseshampoos/conditionersdifferent?
Pantene$14.50
FredericFekkai$54

MonopolisticCompetition

Arethesemascarasdifferent?
Maybelline
Sisley
$4
$43

Oligopoly
Afewverylargesellersdominatetheindustry
Oligopolistsactindependentlybyloweringprices
soonafterthefirstsellerannouncesthecut
Collusion:formallyagreetosetprices
Engageinpricewars

MoreCompetition

LessCompetition

Oligopoly

Ipod

Zune

Oligopoly

Fewproducerscontrolsupplyandprice

CocaColaClassic

Coca-Cola classic
Sprite
Dasani
Barq's
Dannon
Nestea
Rockstar
Evian

Fanta
Fresca
Minute Maid
Mr. Pibb
Powerade
Seagrams Ginger Ale &
Mixers
TAB

Pepsico

Aquafina
Pepsi
Mountain Dew
Sierra Mist
Sobe
Lipton Brisk Tea

MUG Root Beer


Slice
Gatorade
Dole Juice
Tropicana

Cadbury Schweppes

7 Up
Canada Dry
Clamato
Dr Pepper
Hawaiian
Punch
Mott's
Orangina
Snapple

Toyota
Toyota
Scion
Lexus

Chrysler
Chrysler
Jeep
Dodge

GeneralMotors

Chevrolet
Buick
Pontiac
GMC
Saturn
Hummer
SAAB
Cadillac

Monopoly
Onlyonesellerofaparticularproduct
Fewmonopolies

Monopoly

Onesellerdominatesthemarketwithnoclose
substitutes

MoreCompetition

LessCompetition

Monopoly
NaturalMonopoly
efficientproductionby
asinglesupplier

Monopoly
GeographicMonopoly
smalltown

Monopoly
1. Technological
Monopoly - new
invention

Patent: exclusive
right for 17 years

Segway

Monopoly
1. Technological
Monopoly - new
invention

Copyright: lifetime
+ 50 years

ThistelecastiscopyrightedbytheNFLfortheprivateuseofouraudience.Any
otheruseofthistelecastorofanypictures,descriptions,oraccountsofthegame
withouttheNFLsconsent,isprohibited.

Monopoly
1. Government
Monopoly government owned
businesses

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