Please pick up a Warm Up sheet from the folder on the table in front, get out a pen or pencil, and wait for today’s question to appear on the board.

Warm Up How is monopolistic competition different from pure competition?

Wednesday, March 4, 2015 Objective: Students will be able to explain and give examples of oligopolies and monopolies. Purpose: Understanding the structure of markets will make you a better consumer.

Reminders 59 schools days remaining You must pass this class in order to graduate

Monopolies Monopoly: only one seller of a particular product Most monopolies are imperfect, meaning there is some competition, but it is only a fraction of the market Sherman Antitrust Act: prevents anti-competitive practices including the establishment of monopolies

Types of Monopolies Natural Monopoly: a single firm can produce a product more cheaply than any other company Geographic Monopoly: a monopoly based on the absence of other sellers in a certain geographic area Technological Monopoly: a firm has a monopoly because it owns or controls a manufacturing process or other scientific advantage

Types of Monopolies Government Monopoly: monopoly created or owned by the government Examples: US Postal Service, Amtrak, Water utility companies Government-granted monopoly: government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service Examples: Cable companies, power companies (except in Texas), natural gas companies, public transit companies

Case Study: AT&T Before 1982, AT&T was the only phone company in the United States Local service was provided by 7 different providers, all based in specific regions of the country

Case Study: AT&T By 2005, various mergers had occurred in the telecommunications industry, mainly due to the high costs of operation Currently, the telecommunications industry is an example of an _______________.