1 / 9

Bell Ringer #15 – 11/1/10

Explore the concept of non-price competition and its impact on brand choices. This article discusses the factors that influence consumers' purchasing decisions in a perfect competition market and the role of product differentiation in monopolistic competition. It also includes homework questions for further understanding.

cfoust
Download Presentation

Bell Ringer #15 – 11/1/10

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Bell Ringer #15 – 11/1/10 • To “differentiate” products, sellers use “nonprice competition” • Considering products you listed on Friday, come up with 3 “nonprice” factors that affect which brand you purchase.

  2. Perfect Competition • Perfect Competition occurs when buyers (consumers) and sellers (producers) each compete directly under the laws of supply and demand. • No one buyer or seller controls the prices.

  3. Perfect Competition exists when… • Buyers and sellers act independently • Sellers offer identical products • Buyers are well informed about products • Sellers can enter or exit the market easily

  4. A perfect competition market usually contains lots of businesses selling identical products

  5. MONOPOLY • When sellers have non-identical products, competition is no longer based only on price. • A unique product can lead to a single-firm market. • A monopoly occurs when one seller controls all production of a good or service.

  6. Monopolistic Competition • No market is perfectly competitive • Monopolistic competition occurs when sellers offer different, rather than identical, products. • Each firm seeks to have monopoly-like power by selling a unique product.

  7. Product Differentiation • Sellers in monopolistic competition attempt to convince buyers to show that their product is different • Goal is show “superiority” over other product choices.

  8. Homework • Read Ch 6, Sn 1 • Questions 1, 2, & 3 on page 122

More Related