2. Agenda Anything New? Relax….Janet is OK Overview of Chapters 8-11 Intro to Chapter 8 HOMEWORK Read Chapter 8 (Including the Last Word) Questions 3 (skip d) Problems 2, 4 (don’t forget e and f on page 180)

3. anything new?

4. Overview of Chapters 8-11 Four Market (Industry) Structures 1. Pure Competition 2. Monopolistic Competition 3. Oligopoly 4. Monopoly

5. Overview of Chapters 8-11 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 Elasticity* totally elasticelastic inelastictotally inelastic * La Salle BONUS!!! GOAL TOOLS

6. Overview of Chapters 8-11 Pure Monopolistic CompetitionCompetitionOligopolyMonopoly Characteristics Demand Curve Graph

7. video http://www.youtube.com/watch?v=9Hxy- TuX9fs

8. Three Minute Break

9. Chapter 8 A few facts about Pure Competition MR = P = D = AR Figure 8.1 MR = Marginal Revenue P = Price D = Demand AR = Average Revenue

10. Chapter 8 An additional fact about Pure Competition (and every other structure) MR = MC Very important…it’s money in the bank!

11. Chapter 8 A few facts about Pure Competition (and every other structure) MR = MC Very important…it’s money in the bank!

12. Chapter 8 MR = MC Here’s how it works…. A firm will produce until MR = MC. Why? Think about it.

13. Chapter 8 MR = MC Figure 8.3 It’s easier than it looks

14. La Salle Bonus Car buying…Do I buy or do I lease? You are considering buying a car. The deal offers you a chance to lease the car* rather than buy it. What do you do? * A lease is a fixed term contract (perhaps 36 months) to own the car for that period of time. You pay the monthly lease payments then return the car at the end of the term (36 months in this case).

15. La Salle Bonus Car buying…Do I buy or do I lease? http://audipasadena.rusnakonline.com/i ndex.htm

16. La Salle Bonus Car buying…Do I buy or do I lease? Facts… $399 per month for 36 months to lease the car. Spend $33,800 to buy the car. You can borrow $25,000 at 6%* Earn 8% on your investment * http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

17. La Salle Bonus Car buying…Do I buy or do I lease? What do you drive that 37 th month?

18. La Salle Bonus Car buying…Do I buy or do I lease? More Information… http://auto.howstuffworks.com/buying-selling/how-to-lease-a-car.htm

19. HOMEWORK Read Chapter 8 (Including the Last Word) Questions 3 (skip d) Problems 2, 4 (don’t forget e and f on page 180)