1. Economic Systems and Structures
Unit 7

2. The Four Market Structures
Part 1

3. Unwrap the Objectives Factual: Identify the four market structures
Conceptual: Compare and contrast the four market structures
Communicative: Categorize the four market structures

4. Agenda Unwrap the Objective Lecture Notes Video Questions Chart It Out
Check It Out
Essential Question

5. Essential Question
If you were a business owner, what market structure would you prefer? If you were a consumer, what structure would you prefer?

6. The Four Market Structures
Part 1

7. Video Questions https://www.youtube.com/watch?v=Sb_-wfmJnHA
According to the video what is a pure monopoly?
According to the video why are laws against Monopolies called anti trust laws?
According to the video what is horizontal integration?
According to the video what is vertical integration?
According to the video how long do most patens last?
According to the video what is a natural monopoly?
According to the video what is price discrimination?

8. Video Questions According to the video what is a pure monopoly?
A Market controlled by one seller with a good or service that has no close substitutes
According to the video why are laws against Monopolies called anti trust laws?
Monopolies used to be called trusts
According to the video what is horizontal integration?
The Act of buying companies that produce similar products
According to the video what is vertical integration?
When a company directly owns or controls its supply chain
According to the video how long do most patens last?
20 years
According to the video what is a natural monopoly?
When it is more cost effective to have one large producer rather than several smaller competing firms
According to the video what is price discrimination?
Charging different people different prices for the same product or service

9. Perfect Competition Occurs when there are many sellers
There is easy entry and exiting of firms
Products are identical from one seller to another
Sellers are price takers.
A company that must accept the prevailing prices in the market of its products
The company is unable to affect the market price.

10. Perfect Competition Continued
Size of market
Companies have little control over market because they only own a small part of it
Easy of Entry
It is very easy to enter or exit
Similarity of products
Products are the same in a market
Control of price
Firms have to charge what people or willing to pay even a few cents will cost them all business

11. Monopolistic Competition
Occurs when there are there are many firms that offer similar products
There is easy entry and exiting of firms
Products are nearly identical from one seller to another
Sellers are price setters
The firms or companies set prices.
Companies are able to do this because of uninformed consumers not knowing how the small changes in the product should impact the price

12. Monopolistic Competition Continued
Size of market
Companies have little control over market because they only own a small part of it
Easy of Entry
It is very easy to enter or exit
Similarity of products
Products are nearly the same in a market
Control of price
Firms set prices for products but often have sales to draw attention to their product

13. Oligopoly
Is when there are few firms in a market and they are able to act like a monopoly
Prices are set by a price leader
A firm that is followed by others when it changes the price
New firms need lots of capital to enter the market

14. Oligopoly Continued
Size of market
Companies have a lot of control over market because there are only a few firms in the market
No firm has complete control of the market
Easy of Entry
It is difficult to enter the market because the other firms have so much control
Similarity of products
Products are nearly the same in a market
Control of price
Firms set prices for products like a monopoly
When a price leader changes prices the other firms follow

15. Monopoly Is when a market is controlled by a single firm
That firm is able to block other firms from entering the market by controlling prices or materials
People must purchase goods from the single source are do without

16. Monopoly Size of market Easy of Entry Similarity of products
A single firm has complete control over the market
Easy of Entry
It is almost impossible to enter the market
Similarity of products
Products are the same in a market
Control of price
A firm sets prices for products

17. Chart It Out
Place the following examples (letter only) on line where they belong
Nike and basketball shoes
Entergy in Tangipahoa Parish
Burger king
Google
A new car manufacturer
Monopoly
Perfect Competition

18. Check It Out
In the Space provided describe each market’s control of the four categories.
Size of Market
Ease of entry
Similarity of Product
Control over Price
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly

19. Competition Consumers and Producers
Part 2

20. Unwrap the Objectives Factual: Define Producers and Consumers
Conceptual: Explain how competition affects both Producers and consumers
Communicative: Describe how competition impacts prices for consumers

21. Agenda Unwrap the Objective Lecture Notes You decided Thought Map
Essential Question

22. Essential Question
How does competition impact consumers?

23. Competition Consumers and Producers
Part 2

24. Consumers A person who purchases goods and services for personal use
These are the people that buy things
They also are the people that drive demand
Producers are constantly searching for ways to ensure that consumers spend their money at their firm

25. Producers
A person, company, or country that makes, grows, or supplies goods or commodities for sale
They are the ones that control production in response to consumers demand
They control the supply of goods
They are looking for ways to increase profits

26. Production Efficiency
Production efficiency is an economic level at which the economy can no longer produce additional amounts of a good without lowering the production level of another product
The aim is to find a balance between the use of resources, rate of production and quality of the goods being produced
True production efficiency is only reached when it is not possible to improve performance in one area without doing harm to another. 

27. Quality and Quantity
Quality - The standard of something as measured against other things of a similar kind; the degree of excellence of something.
Quantity - The amount or number of a material or immaterial thing not usually estimated by spatial measurement
In many cases a firm must chose one or the other
Quality generally cost more because better materials and more time is spent in the production
Quantity generally costs less because cheaper materials are used and the supply is higher

28. You decide
If you were a wholesale person, would you rather try to sale a cheap product to a store or an expensive product.
Your salary is based on commission (the more you sell the more you make)

29. Pricing
Is the process whereby a business sets the price at which it will sell its products and services
Things to consider
Your price – what the materials cost you
Your Profit – how much do you want to make on your product
Market Demand – how much do people want your product
Strategy – changes in price to change demand

30. Employment Opportunities
Competition leads to producers looking for more and better workers
This can allow workers to demand more money
All employees are consumers
As consumer wages increase so does consumption

31. Thought Map
Create a graphic organizer on the back of your activity sheet that Illustrates what a producer considers when determining the value of a item and one for what a consumer considers when determining the value of a item.
The Item
Consumer
Producer