1. Agenda Quiz on Current Reading “If a Cable Giant Becomes Bigger” Review of Monopolies Homework Intro to Chapter 11 Figure 11.1 Test #2 February 26 Chapters 6-8, 10-11

2. Quiz New York Times…”If a Cable Giant Becomes Bigger”

3. Overview of Industry Structures Pure Monopolistic CompetitionCompetitionOligopolyMonopoly Characteristics Number of Sellers Many Several Few One Product Differentiation None Some More ???? (commodity) Barriers to None Some More Total Entry / Exit Control of Price None Some Significant Total GOAL TOOLS Where do businesses want to be?

4. Review Monopolies Characteristics of a Monopoly 1.Single Seller / Producer 2.No Substitutes 3.Price Maker 4.Absolute Barriers to entry / exit

5. Monopolies Types of Monopolies 1.Legal Monopoly – Patents 2.Geographic Monopolies – Public Schools 3.Natural Monopolies – Utilities 4.Technology - iPad

6. worksheet another type of monopoly…low cost provider. The Wal-Mart strategy

7. Monopolies Price Discrimination…charging different prices to different groups Expedia….are there really only x tickets left?

8. Monopolies Price Discrimination…Characteristics Needed 1.Monopolistic Power (or at least Oligopolistic Power) 2.No Resale 3.Market Segregation / Customer Segregation

9. Monopolies Price Discrimination…Examples Airlines Electricity Hotels College Education

10. HOMEWORK Chapter 10 Problems 1 & 2

11. Three Minute Break

12. Intro to Chapter 11 Oligopolies and Monopolistic Competition

13. Overview of Industry Structures Pure Monopolistic CompetitionCompetitionOligopolyMonopoly Characteristics Number of Sellers Many Several Few One Product Differentiation None Some More ???? (commodity) Barriers to None Some More Total Entry / Exit Control of Price None Some Significant Total GOAL TOOLS Where do businesses want to be?

14. Intro to Chapter 11 Oligopolies and Monopolistic Competition Why are 95% of industries in one of these categories?

15. Intro to Chapter 11 Oligopolies and Monopolistic Competition Why are 95% of industries in one of these categories? Because businesses move to the right toward monopoly and competition / regulation pushes businesses to the left.

16. Overview of Industry Structures Pure Monopolistic CompetitionCompetitionOligopolyMonopoly Characteristics Number of Sellers Many Several Few One BUSINESSES Product Differentiation None Some More ???? (commodity) Barriers to None Some More Total Entry / Exit COMPETITION / REGULATION Control of Price None Some Significant Total GOAL TOOLS Where do businesses want to be?

17. MR = MC Graph page 220

18. The Government’s Role Chapter 11 Why does the government regulate an industry? When do the regulators step in? How regulators measure control of an industry?

19. Concentration Ratio Page 218 40% is the magic number

20. Herfindahl Index Page 219 It’s easier than it looks

21. Herfindahl Index Below 100 indicates a highly competitive. Below 1,500 indicates competitive. Between 1,500 and 2,500) indicates moderate concentration Above 2,500 indicates high concentration (oligopoly). Likely to be regulated

22. Chapter 11 questions Q. 2, 7, 8

23. Test #2 February 26 Chapters 6-8, 10-11