market systems jeopardy review (1)
Post on 29-Jul-2015
51 Views
Preview:
TRANSCRIPT
NEXT
NEXT
NEXT
NEXT
NEXT
NEXT
15
20
25
5 10Monopolies
Oligopolies
Monopolistic Competition
MISC
Perfect
Competition
5
5
5
5
10
10
10
10
15
15
15
15
20
20
20
25
25
25
25
20
Team OneTeam One
Team TwoTeam Two
Team ThreeTeam Three
Team FourTeam Four
Team FiveTeam Five
Team SixTeam Six
Why can a monopolist raise prices without
fear of losing customers?
Show Answer
Because for the most part, buyers would
have nowhere else to go for that particular
good or service
Back to Board
Sergio has just released the hit single, “Gangsta thug
Paradise.” If he is 12 years old, and dies when he’s 85.
How many years does he own the rights to the song?
Show Answer
Rest of author’s life + 70 years
73 + 70 = 143
Back to Board
We can assume because there is only one firm in a
Monopoly, that there are intense barriers to entry.
Name two barriers to entry in a Monopoly
Show Answer
• Copyrights
• Patents
• Immense costs of starting a business
• State laws and regulations Back to Board
There are four characteristics of a
Monopoly. Name 2 of them
Show Answer
• A Single Seller
• No Substitutes
• Immense Barriers to entry
• Complete control of the market
Back to Board
Show Answer
There are four types of Monopolies. They are
categorized by the reason the monopoly exists. Give three of
the four
• Natural Monopolies: Government grants exclusive rights to companies like
transportation, utilities, or military.
• Geographic Monopolies: Location of market and potential for profits are too
small for other firms to enter
• Technological Monopolies: Patents and Copyrights. Patents exists for 20 years, copyrights for the life of author plus 70
years
• Government Monopolies: Very similar to Natural Monopolies. The only difference
is that the Government controls itBack to Board
How many firms can there be in an
Oligopolistic Market?
Show Answer
The prefix “Oli” means few. If you can count
the number of firms on two hands, it’s
probably an Oligopoly
Back to Board
What percent of the market do Oligopolies
usually own or are responsible for?
Show Answer
Oligopoly firms are extremely large and
own 70 to 80 percent of the market
Back to Board
Give three examples of a firm participating in
an Oligopolistic Market
Show Answer
Cellphone Carriers
Video Game Market
Cereal
Drug Cartels of Latin America
Back to Board
Show Answer
What is Non-Price Competition?
Back to Board
Advertisements will focus on minor
differences in goods or services instead of the
price
Explain why Game Theory is specifically geared towards
Oligopolies. Think…why can’t we create a Game Theory matrix with a monopoly? Why not with a farm
in Perfect Competition?
Show Answer
Game Theory is a mathematical way of predicting the moves of firms. Game theory only works
with Oligopolies because decisions firms make can actually impact each other, as opposed to
Perfect competition.
Back to Board
What is one example of a market in a
Monopolistically Competitive Market?
Show Answer
• Clothing and other Apparel
• Fast Food Restaurants
• Tech like Computers/Tablets
• Coffee Shops
Back to Board
How do firms in Monopolistic
Competition control the market price of
products?
Show Answer
M.C. Markets have a little control over the
price. They can do this through establishing
customer loyalty
Back to Board
What is the major financial way firms in a
Monopolistically Competitive market establish Customer
loyalty?
Show Answer
Competitive Advertisements
Firms will spend countless millions of dollars into creating
catchy, and clever advertisements in hopes that
consumers will acknowledge and continually purchase their
products.
Back to Board
There are basically two schools of thought in regards to the way
people pay for brand name items. What are
they?
Show Answer
• Brand name companies hurt consumers by charging more, just for the name associated with the
product
• Brand names can represent a guarantee of quality of a particular
good or service
Back to Board
What is Differentiation and give an example of this in the market place
Show Answer
Differentiation is when particular products are slightly different from other similar products.
Or basically
Firms will convince consumers that their products are different,
and therefore better for themBack to Board
Before we categorized businesses by the # of
owners. How do we categorize businesses in Market Structure?
Show Answer
Market structure is organized by how much competition they face
Back to Board
Show Answer
What is one example of a market that is
Perfectly Competitive?
Agriculture and Farming
Back to Board
What is a patent, and what is an example of a US Patent?
Show Answer
A Patent gives you a technological monopoly over your
own invention. They give you exclusive rights to make, rent, or sell your invention for 20 years
Razor, Refrigerator, Diesel Engine
Back to Board
Show Answer
What is Competition and who is it
specifically between?
Competition is the rivalry between entrepreneurs of
similar products. If products are not similar there is NO competition.
Back to Board
Show Answer
Competition between firms has very
attractive benefits to consumers. Name three ways competition helps
us
Back to Board
• Competition forces prices to be low
• Competition forces companies to innovate
• Competition gives consumers choices
Show Answer
What can be said about the number of firms in a Perfectly Competitive
Market?
Back to Board
There are numerous buyers and sellers. We
can say there are hundreds and in some
cases thousands
Show Answer
How much power does a firm in a Perfectly
competitive firm have in affecting the price?
Back to Board
Firms have NO influence on the price.
If one firm raises the price, consumers can
just buy from someone else
Show Answer
What can we assume about the barriers to entry in a Perfectly
Competitive Market if we look at the number
of firms there?
Back to Board
Because there are so many different firms, we can assume that there are NO barriers to
entry in a Perfectly Competitive market.
How common are Perfectly Competitive markets in the U.S.?
Show Answer
Perfectly Competitive markets are relatively rare. Most firms are
either Oligopolies or in Monopolistic Competition. There
are few true Monopolies and Perfect Markets.
Back to Board
There are 5 conditions that need to be met for a Perfectly Competitive
market. Name three
Show Answer
• Large Market – Many buyers and sellers
• Identical Products
• Easy Entry and Exit from the Market (No Barriers)
• Easily Obtainable Information
• Independence. Buyers and Sellers cannot work together to affect price
Back to Board
Show Question
What is either Empire Carpet’s Number, or
Luna’s Number?
Show Answer
302928272625242322212019181716151413121110987654321
• Empire: 800-588-2300
• Luna: 773-202-LUNA (5268)
Back to Board
top related