1. Market Structures Theater
Today: stock market! Woah!
Everyone read page

2. Market Structures Theater
Group 1: Perfect competition (p )
Group 2: Monopolistic competition (p 173)
Group 3: Oligopoly (p )
Group 4: Monopoly (p )
Your task: create a skit or scenario that teaches the major ideas of your group’s market structure. At minimum 2 minutes long; at maximum 5 minutes long.
We will present tomorrow, after 15 minutes to finish prep time. Everyone must be involved in the skit in some way.

3. Market structures theater!
You have 10 minutes to prepare as a group.
Then, each group will present
2 minutes minimum

4. Market Structures – in your group, take 5 minutes to fill out what you can

5. Competitive markets, aka “price takers”
Pure competition
Coke machine or vending machine
Stock market
Monopolistic competition
Designer clothes, shampoo,, aspirin

6. Pure Competition Many buyers and sellers
Nobody with enough power to influence prices because
Similar products – choices made by price only
Informed buyers who compare products
Easy exit and entry into market

7. Pure Competition Few real-life markets meet these conditions. Why?
Hard to meet all five requirements.

8. Monopolistic Competition: all conditions of perfect competition, except for identical products
Product differentiation
Real or perceived
Shoes, computers, phones
Non-price competition
What else is at play here? Why?
Increased profits based on demand shifts
Advertising!

9. Non competitive markets, aka “price markers”
Oligopoly
Auto industry
Fast food
Monopoly
Utility companies

10. Oligopoly: power in the hands of a few
Few large sellers
When one acts, the others typically follow
Similar products
Set apart only by product enhancements
Difficult market entry – consumer loyalty

11. Oligopoly: power in the hands of a few
Collusion: price-fixing
Why?
Examples?
OPEC, diamonds, etc

12. Monopoly: power in the hands of one
Single suppliers
No close substitutes available
Difficult market entry
Some monopolies are good and necessary – why?

13. Monopoly: power in the hands of one
Natural monopoly:
It’s more cost-effective to have one company produce the product
Utilities
Geographic:
Only one in the area
Technological
Patents
Government
Water, alcohol laws

14. Market Structures Monopolistic Competition Perfect Competition
Least
Competitive
Most
Competitive
Monopolistic Competition
Perfect Competition
Monopoly
Oligopoly
Examples:
Utilities- Water & Electricity
Automobiles
Telecommunications
Airlines
Designer clothes
Hotels
Hair Salons
Agriculture

15. Market Structures – page 175 in your textbook