Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Class : y10 Lesson Topic: Competitive Markets Scheme of Work: Business Economics Part 2 COMPETITION

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly.

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Lesson Objectives P&D Planning and Planning and Data ALL (KNOWLEDGE) Define and describe the terms for a competitive market MOST (ANALYSIS) Examine and Analyse the concepts of a competitive market SOME (EVALUATION ) Evaluate the pros and cons & Justify your views if competition is favourable Higher thinking Skills

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Planning Tools P&D Planning and Planning and Data

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Define and describe the terms for a competitive market [Grade E-D] Examine and Analyse the concepts of a competitive market [Grade C-B] Evaluate the pros and cons & Justify your views if competition is favourable [Grade A-A*]

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. KeywordDefinition Firm Barriers to Entry Competition Monopoly Oligopoly Product Differentiation Innovation CONNECTIVES

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. CONNECTIVES for Analysis CONNECTIVES for Application CONNECTIVES for Evaluation COMPARING Equally… As with… Like… In the same way… Similarly… Even so… Likewise… CAUSE & EFFECT Consequently…Due to… As a result…Therefore.. Because of…Because… CONCLUDING Firstly…After… Secondly…Before… Overall…I believe… Finally…I think … In conclusion…it depends… To conclude…short term… Meanwhile…Long term… CONTRASTING Although…Except… Moreover…If… However…Yet… Apart from…Unless… Despite…As long as… EMPHASISING Most importantly… Significantly… Notably… Especially… Above all… In particular… Indeed… QUALIFYING Despite…Yet… As long as…Unless… Apart from…If… Moreover…Except… However…Although… ADDING In addition…And… Too…Also… Additionally…As well as… Furthermore… ILLUSTRATING For instance…Such as… In the case of…So… For example… As revealed by… As illustrated by…

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Climb the Ladder A-A* 1.To what extent 2.Do you think 3.Evaluate whether (10m) 10+ connectives & key words C-B 1.Explain 2.Compare 3.Analyse (5-9m) 5+ connectives & key words E-D 1.Define 2.Describe 3.Identify (2-4m) 2 + connectives & key words ATD Apply to Apply to demonstrate

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Recap Economies of Scale COMPLETE TABLE… InternalExternal Economy of Scale Lowering of ______ _______ as firm _______. 5 types are: Diseconomy of Scale Not Aplicable

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. You have choice of setting up a fruit stall in market or oil company! Which is easier? Which is less costly to setup? Which has more government regulation? Which has potential economies of scale? Which is more profitable?

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Opening your own oil/petrol company There are massive barriers to entry in opening an oil company: Massive costs of drilling for oil. Capital investment required. Purchase of land to drill Government rules to follow Advertising and distribution world wide BARRIERS TO ENTRY ARE DIFFICULTIES WHICH STOP NEW FIRMS ENTERING A MARKET..

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Opening your own fruit stall This on the other hand is much easier to do. Capital investment only requires some working capital, maybe a stall and a location in a market. Government rules are less of a problem and costs are much reduced. BARRIERS TO ENTRY ARE LOW! THEREOFRE NEW FIRMS ENTER THE MARKET EASILY.

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. BARRIERS TO ENTRY Low barriers to entry = More competition. There could be thousands of fruit stalls in a country but only a handful of oil companies. High barriers to entry = Less competition! Is competition good?

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. A Competitive Market A competitive market has low barriers to entry New firms can enter the market easily High degree of firms in market (competitive) Products are similar therefore little product differentiation. Firms have little control over price (So many) Prices are driven low for everyone. Think of a farmer selling wheat….

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. How does competition affect everyone? ConsumerFirmsSociety Prices Satisfied with low prices. Low prices to attract customers. Effective price mechanism allocation. Costs / Profit Costs / Profit low to keep prices low. Efficiency Efficient allocation of resources for everyone. Innovation Low profits means less capital for firms to reinvest in new products.

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. 30 Secs – How many firms can you remember?

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Apply learning Think of the industries below and assess with your partner the degree of competition. Is it competitive or not and why not? Sports brands Supermarkets Cars Fast food Clothes Which firm faces MOST / LEAST competition ? Which firm has HIGH / LOW PRICES ?

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Questions

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Perfect Competition Pure Monopoly Monopolistic CompetitionOligopoly 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

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Lesson Objectives P&D Planning and Planning and Data ALL (KNOWLEDGE) Define and describe the terms for a competitive market MOST (ANALYSIS) Examine and Analyse the concepts of a competitive market SOME (EVALUATION ) Evaluate the pros and cons & Justify your views if competition is favourable Higher thinking Skills

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. A-A* 1.To what extent 2.Do you think 3.Evaluate whether (10-14m) C-B 1.Explain 2.Compare 3.Analyse (5-9m) E-D 1.Define 2.Describe 3.Identify (2-4m) ATD Apply to Apply to demonstrate Apply to Demonstrate Review the Learning

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Pass the Parcel Add as much information you can remember from today’s lesson When the horn blows – pass your sheet to the next table! R Review the Learning Review the Learning

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Neighbours 2 things your neighbour has learnt today 1 question your neighbour wants to ask R Review the Learning Review the Learning

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. Summarise your learning today into a single tweet 140 characters Keep all of the information Tweet STOP R Review the Learning Review the Learning

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. 1 question you need to ask 2 new things you learnt 3 pieces of information R Review the Learning Review the Learning

Economics Section: Competitive MarketsFurther Reading. Chp 22 Keywords – Firms, competition, barriers to entry, innovation, product differentiation, monopoly. 5 minutes... GO STOP