1. 5/3 Warm-Up Make sure name, date, and period are on papers, and pass forward 22.1 and 23.1. 1. According to the Law of Supply, when will the supply of a product likely decrease? 2. The point where quantity demanded and quantity supplied are equal is called what?

2. Understanding Supply and Demand Finish the supply and demand practice on p. 255 and 256 of your manual. Note: You will use the grid to graph supply, demand and a shift in supply and a shift in demand. (4 curves)

3. Understanding Supply and Demand Price $ Quantity 0 50 100 150 200 250 300 350 S1 D1 E1.60.50.40.30.20.10 D2 S2 E2

4. Market Structures & Business Organizations p. 257-258 Objective: Differentiate between market structures and business organizations through class notes and the creation of a foldable review

5. Market Structure PERFECT COMPETITION Many buyers and sellers in the market sellers offer identical products Buyers and sellers are well informed about products sellers are able to enter and exit the market freely

6. Market Structure PERFECT COMPETITION Commodity: a product that is the same no matter who produces it Example: milk, notebook paper, petroleum Perfectly competitive markets are efficient at equilibrium!!

7. Market Structure PERFECT COMPETITION Few markets are perfectly competitive because barriers keep the companies from entering or leaving markets easily - start-up costs are high - many require high degrees of technology

8. Market Structure MONOPOLY A market dominated by a single seller No variety of goods and the seller has complete control over prices Forms when barriers prevent firms from entering a market with only one seller

9. MONOPOLY Natural monopoly- a market that runs most efficiently when one large firm provides all the output. EXAMPLE: utilities- public water, electricity

10. Market Structure MONOPOLY Government Monopoly: a monopoly created by the government Ex: allowing a natural monopoly to form Ex: patent: inventor of the new product has exclusive rights to sell it Ex: Franchise: contract issued by a local authority that gives a single firm the right to sell its goods within an exclusive market (Remember one of the goals of the government in the US has been to encourage competition in the economy)

11. Market Structure MONOPOLY Antitrust laws: laws that encourage competition in the market (Example: Sherman Antitrust act: banned monopolies and other business combinations that prevented competition 1890)…this act was used to break up companies like AT&T

12. Trusts and Monopolies Rockefeller’s Standard Oil Carnegie’s US Steel

13. Market Structure OLIGOPOLY Oligopoly: a market structure in which a few large firms dominate a market (3 or 4 largest firms produce 70-80% of the output) barriers can also create oligopolies…like start-up costs and technology 50% 48% 45% 32% 13%

14. Market Structure MONOPOLISTIC COMPETITION Monopolistic Competition: a market structure in which many companies sell products that are similar but not identical. Many firms, but each with a small market share, highly competitive, very elastic demand. Monopolistic Competition OligopolyMonopoly # of firmsManyFew dominateOne Variety of goodsSome None Control over pricesLittleSomeComplete Barriers to entryLowHighComplete ExamplesJeans, restaurants Movie studiosPublic water

15. OTHER VOCABULARY Communism: a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government (command) Socialism: a system in which the government owns some factors of production and distributes wealth among citizens (command, mixed) Capitalism: a system in which private citizens own most, if not all, of the means of production and decide how to use them with legislated limits (market)

16. Leave it to Beaver Answer the questions you copied earlier to turn in after the episode. Water, Anyone?

17. LEAVE IT TO BEAVER: 1. Does Wally WANT or NEED $3.98? Why? 2. How does Wally plan to earn this money? 3. What is Beaver’s incentive to earn money? 4. Originally, why was there no demand for water? 5. Why does the quantity of water demanded increase? 6. Why is Beaver able to raise the price? 7. What is the term for the driving force behind Beaver’s attempt to be successful? _P__________ _M_________ 8. What type of market has Beaver created? _________ 9. What are the 4 Factors of Production for Beaver’s Water Business

18. Homework Complete Goal 8A review, pp. 271-272 Study for quiz on Supply and Demand

19. FOLDABLE INSTRUCTIONS

20. FOLDABLE ACTIVITY Foldable Activity: See handout for directions You will need: Glue Scissors 1 white sheet and 1 colored sheet of paper

21. 12/9 Warm-Ups After you finish today’s warm-ups, pass forward. 1. In a competitive market, how are prices set? 2. What is a market dominated by a few large profitable firms? Bonus ? Apple sued whom, claiming they ripped off their iPad/iPhones?