Class : y10 Lesson Topic: Oligopoly Scheme of Work: Business Economics

Higher thinking Skills P&D Planning and Data Lesson Objectives ALL (KNOWLEDGE) Define and describe the terms of oligopoly MOST (ANALYSIS) Examine and Analyse the concepts of oligopoly SOME (EVALUATION ) Evaluate the pros and cons & Justify your views of oligopoly Higher thinking Skills

P&D Planning and Data Planning Tools

Personalise your learning. . . Define and describe the terms of oligopoly [Grade E-D] Examine and Analyse the concepts of oligopoly [Grade C-B] Evaluate the pros and cons & Justify your views of oligopoly [Grade A-A*]

Oligopoly Cartel Collusion Interdependence Price War Niche CONNECTIVES Keyword Definition Oligopoly Cartel Collusion Interdependence Price War Niche CONNECTIVES

CONNECTIVES for Analysis CONNECTIVES for Application CONTRASTING Although… Except… Moreover… If… However… Yet… Apart from… Unless… Despite… As long as… COMPARING Equally… As with… Like… In the same way… Similarly… Even so… Likewise… QUALIFYING Despite… Yet… As long as… Unless… Apart from… If… Moreover… Except… However… Although… CAUSE & EFFECT Consequently… Due to… As a result… Therefore.. Because of… Because… ADDING In addition… And… Too… Also… Additionally… As well as… Furthermore… CONNECTIVES for Analysis CONNECTIVES for Application CONNECTIVES for Evaluation CONCLUDING Firstly… After… Secondly… Before… Overall… I believe… Finally… I think … In conclusion… it depends… To conclude… short term… Meanwhile… Long term… EMPHASISING Most importantly… Significantly… Notably… Especially… Above all… In particular… Indeed… ILLUSTRATING For instance… Such as… In the case of… So… For example… As revealed by… As illustrated by…

Climb the Ladder A-A* C-B E-D To what extent Do you think ATD Apply to demonstrate A-A* To what extent Do you think Evaluate whether (8-10m) 10+ connectives & key words C-B Explain Compare Analyse (5-8m) 5+ connectives & key words E-D Define Describe Identify (2-4m) 2 + connectives & key words

List as many firms as you can in the market Car industry Sports brands Gulf Airlines Fast food restaurants

Is there a trend for about 5 dominant firms?

What this oligopoly We’ve looked at competitive market and monopoly. The reality for many big firms is somewhere in between. Oligopoly firms face competition but have SOME market power. Typically this market has 4-5 firms who dominate sales.

Monopolistic Competition Pure Monopoly Perfect Competition Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the greater the degree of monopoly power exercised by the firm. Lots of Competition Competitive Prices No Competition High Prices

Can you think of a market where 4-5 firms dominate?

How do firms grow? Integration Tertiary Sector Secondary Sector Primary Sector

Oligopoly Oligopoly is a market dominated by a few large producers of similar products. Examples: tires, beer, cigarettes, copper, greeting cards, steel, aluminum, automobiles and breakfast cereals

How do Oligopolies form? Barriers to Entry Legal Barriers – Patents Costs Barriers – Economies of Scale Marketing Barriers – Economy of Scale Same as Monopolies

Characteristics of Oligopoly Interdependence – Self-interested behavior that takes into account what other firms do. Therefore firms collude and agree on prices, rather than compete. One form of collusion is the cartel: a formal agreement among producers to set the price and output to increase everyone’s profit.

What they mean for consumers Rigid, possibly higher prices. Lack of genuine price competition High quality products as firms want brand loyalty, therefore lots of marketing. i.e. Non- Price Competition Sometimes firms agreements collapse and a PRICE WAR starts, where firms compete aggressively to win consumers. i.e. Price Competition. Consumer wins!

What they mean for the oligopoly firm Can take advantage of economies of scale – Low cost per unit. Massive marketing spending to convince customers to pay higher prices. Non – price competition. Massive marketing budgets also act as barriers to stop new firms entering. Can charge what they want – High Profits!

What they mean for the society Oligopoly market will have price stability as firms agree on prices. Governments may have to intervene if a cartel limits competition and prices rise too much. There is a reasonable amount of choice for consumers, unlike monopoly where there is no choice.

Supermarket Competition or collusion? Price War? Supposed ‘Price War’ consumers actually paid more. No formal agreement, rather a ‘fake’ attempt at competition but all firms seeking higher prices for higher profit. But, sometimes! Real Price Wars!

Oligopoly Pros and Cons Advantages Disadvantages

PLENARIES

Climb the Ladder A-A* C-B E-D To what extent Do you think ATD Apply to demonstrate A-A* To what extent Do you think Evaluate whether (8-10m) 10+ connectives & key words C-B Explain Compare Analyse (5-8m) 5+ connectives & key words E-D Define Describe Identify (2-4m) 2 + connectives & key words

Higher thinking Skills P&D Planning and Data Lesson Objectives ALL (KNOWLEDGE) Define and describe the terms of oligopoly MOST (ANALYSIS) Examine and Analyse the concepts of oligopoly SOME (EVALUATION ) Evaluate the pros and cons & Justify your views of oligopoly Higher thinking Skills

Pass the Parcel R Review the Learning Add as much information you can remember from today’s lesson When the horn blows – pass your sheet to the next table!

Neighbours 2 things your neighbour has learnt today Review the Learning 2 things your neighbour has learnt today 1 question your neighbour wants to ask

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3 pieces of information 2 new things you learnt 1 question you need to ask 2 new things you learnt 3 pieces of information R Review the Learning

5 minutes. . . GO STOP