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Chapter 7

Chapter 7 . Jean Acevedo Anthony martinez Nermin sener Elizabeth vasquez Ishmel bolano Fernando banchon. BY:ISHMEL BOLANO 2 ND PERIOD MS.MITAT 3-23-11. Chapter 7, Section 1. Section 1, :Perfect Competition. www.pearsonsuccessnet.com.

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Chapter 7

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  1. Chapter 7 Jean Acevedo Anthony martinez Nermin sener Elizabeth vasquez Ishmel bolano Fernando banchon

  2. BY:ISHMEL BOLANO 2ND PERIOD MS.MITAT 3-23-11 Chapter 7, Section 1

  3. Section 1, :Perfect Competition www.pearsonsuccessnet.com In a perfect competition its known as the simplest market structure also called pure competition. In order to have a perfectly competitive market is one with a lot of firms all producing the same product for a use. It assumes that the market is working properly and that all the firms in the market sell the product for the same price There's only one decision a producer can make which is how much of the product would be produced given their production costs and the markets prices.

  4. Four Conditions for a Perfect Competition; www.pearsonsuccessnet.com Many industries meet all the checkpoints in order for them to become a perfect competition on the other hand not all succeed. The markets that succeed require them to follow 4 important guidelines for them to stay on track: 1. Many buyers and sellers participate in the market. 2. Sellers offer identical products. 3. Buyers and sellers are well informed about the product there being advertised to 4. Sellers are able to enter and exit the market freely. Following the guideline in the above will guarantee the market to successfully advance as a perfect competition

  5. Identical Products www.pearsonsuccessnet.com The second condition in a perfect competition is that there are no differences between the products sold by different suppliers it all remains the same A product that is considered the same regardless whoever makes or sells it is called commodity.

  6. Informed Buyers and Sellers = The time spent gathering information must be worth the amount of money that will be saved www.pearsonsuccessnet.com The third condition for a perfectly competitive market is the buyers and sellers know enough about the market in order to find the best deal. In order for the market to function properly both buyers and sellers have an encouragement to gather as much information there able to get.

  7. Free Market Entry and Exit www.pearsonsuccessnet.com The final condition of perfectly competitive markets is that firms must be able to enter when they can make money and leave them when they cant earn enough money for them to stay. Examples: when the pioneering companies began to serve frozen foods earning a lot of money throughout the journey the firms withdrew from the market and no one bought the products

  8. Barriers to Entry www.pearsonsuccessnet.com Factors that make it difficult for new firms to enter a market is called barriers to entry Barriers to entry can lead to imperfect competition Entrepreneurs need to have money before they begin a business for them to receive any type of income. The expenses that new business must pay before the first product reaches the customer are called stand-up costs If the stand-up costs in an economies too high an entrepreneur is most likely not going to enter that market.

  9. Monopoly • Defining Monopoly: • Monopoly: forms when barriers prevent • firms from entering a market that has a single • supplier. • Monopoly market has one seller but a many • number of buyer. • The problem with monopolies is that they • can take advantage of their market power and • charge prices. • Forming Monopoly: • All monopolies have one trait in common: • -Single seller in a market.

  10. Economic Scale: • Economies of scale: factors that cause a producers average cost per unit to fall as output rises. • The average cost of producing each good increases as output increases. • As production increases, the firm becomes more efficient, even at a level of output high enough to supply the entire market. • As output increases the cost per unit falls and continues to fall.

  11. Natural Monopolies: • Natural monopoly: a market that runs most efficiently when one large firm supplies all of the output. • If second firm enters the market, competition will drive down the market price charged to customers and decrease the quantity each firm can sell. • In return for monopoly status, a firm with a natural monopoly agrees to let government control the prices they can charge and what services they must provide. • Natural monopolies are typically utilities such as water, electricity, and natural gas.

  12. Technology and Change: • Sometimes the development of a new technology can destroy a natural monopoly. • A new invention can cut fixed costs and make small companies as efficient as one large • firm.

  13. Government Monopolies • Government Monopoly: monopoly created by the government. • Technological Monopolies: • Patent: a license that gives the inventor a new product the exclusive right to sell it for a • certain period of time. • Why would government want to give a company monopoly power? • - Patents guarantee that companies can profit from their own research without competition. • The market power that comes with the patent allows firms to set whatever prices they wish.

  14. Franchises and Licenses: • Franchise: the right to sell a good or service within an exclusive market. • Governments use parks, and schools to use franchises to keep small markets under • control. • License: a government issued right to operate a business.

  15. Industrial Organizations: • Rarely the government allows the companies in an industry to restrict the number of firms in the market. • The problem with this type of monopoly is that team owners for example may charge high prices for tickets.

  16. Links 2nd slide • http://www.google.com/imgres?imgurl=http://www.planetware.com/i/photo/people-shopping-in-the-streets-of-yangon-rangoon-mya001.jpg&imgrefurl=http://www.planetware.com/picture/myanmar-burma-people-shopping-in-the-streets-of-yangon-rangoon-mya-mya001.htm&usg=__AOMP5MKzS6V5RvYhbq7nnAcQ5L8=&h=302&w=450&sz=77&hl=en&start=2&zoom=1&tbnid=VcSLeVQFFFGf6M:&tbnh=85&tbnw=127&ei=IAmITfPcKYKXtwegg7CJDg&prev=/images%3Fq%3Dpeople%2Bshopping%2Bimages%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1 3rd slide • http://www.google.com/imgres?imgurl=http://i.investopedia.com/inv/dictionary/terms/diseconomies%2520of%2520scale.gif&imgrefurl=http://www.investopedia.com/terms/d/diseconomiesofscale.asp&usg=__BjSetfv5C9638hGd4tthf28NoqY=&h=266&w=360&sz=6&hl=en&start=1&zoom=1&tbnid=KwO6oYuRDYgWuM:&tbnh=89&tbnw=121&ei=LQqITeT2CYG4tgf_ydyIDg&prev=/images%3Fq%3Deconomic%2Bscale%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1 4th slide • http://www.google.com/imgres?imgurl=http://www.chem1.com/acad/sci/wat-images/watertex_md.jpg&imgrefurl=http://www.chem1.com/acad/sci/aboutwater.html&usg=__zmLIj1aQjA7yD39A8qNLf7m6oEk=&h=330&w=500&sz=35&hl=en&start=0&zoom=1&tbnid=_sNMxdXis2DVhM:&tbnh=117&tbnw=156&ei=l4yITbCwKMXpgQf7-LDODQ&prev=/images%3Fq%3Dwater%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=156&oei=l4yITbCwKMXpgQf7-LDODQ&page=1&ndsp=30&ved=1t:429,r:3,s:0&tx=70&ty=58 • http://www.google.com/imgres?imgurl=http://www.marcgunther.com/wp-content/uploads/natural-gas_4.jpg&imgrefurl=http://www.marcgunther.com/2010/11/28/natural-gas-friend-or-foe-of-sustainability/&usg=__3Dl8wVjCZEMNmj1jIMgq_xZXhuE=&h=352&w=350&sz=21&hl=en&start=1&zoom=1&tbnid=twUuBlWVihpHjM:&tbnh=120&tbnw=119&ei=aIyITfTZHIfJgQeMt7m8DQ&prev=/images%3Fq%3Dnatural%2Bgas%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1 • http://www.google.com/imgres?imgurl=http://www.how-things-work-science-projects.com/images/lightening_500x332.jpg&imgrefurl=http://www.how-things-work-science-projects.com/electricity-science-projects.html&usg=__3UeiunFbqmexBNZMBELONZIJurI=&h=332&w=500&sz=31&hl=en&start=15&zoom=1&tbnid=eRBkhT126yHKwM:&tbnh=86&tbnw=130&ei=SoyITdClK4nogQfY-OHSDQ&prev=/images%3Fq%3Delectricity%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1 • http://www.progress.org/fold74.htm

  17. Links cont.. 5th slide • http://www.google.com/imgres?imgurl=http://www.purchaseipad2.com/wp-content/uploads/ipad-apps.jpg&imgrefurl=http://www.purchaseipad2.com/&usg=__GauJYx-grUBHiXbXrBcTm5MgKoA=&h=400&w=650&sz=38&hl=en&start=7&zoom=1&tbnid=IwBMjdXdcQjKWM:&tbnh=84&tbnw=137&ei=pAqITcCTLMq4twe0rNT2DQ&prev=/images%3Fq%3Dipad%2B2%26um%3D1%26hl%3Den%26sa%3DX%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1 6th slide • http://www.google.com/imgres?imgurl=http://2.bp.blogspot.com/_YlH1XSlujrQ/RgVk0uAIFtI/AAAAAAAAARQ/N5sdWVUfnVo/s400/stacks%252520of%252520money.jpg&imgrefurl=http://bostonmaggie.blogspot.com/2007_03_01_archive.html&usg=__lh2xfbMtGDs2HIPNHUWwAzhgZrU=&h=309&w=339&sz=15&hl=en&start=3&zoom=1&tbnid=8kRIkifjsVYtYM:&tbnh=108&tbnw=119&ei=vJOITaLpCMq2tgey3tXsDQ&prev=/images%3Fq%3Dmoney%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1 7th slide • http://www.google.com/imgres?imgurl=http://www.merchantservices.cc/wp-content/uploads/2009/07/franchise.gif&imgrefurl=http://www.merchantservices.cc/merchant-services-business-specialties/franchises/franchises/&usg=__IgyG_zRPTOrJuOd9Ir9Ft3BZQPM=&h=350&w=322&sz=33&hl=en&start=1&zoom=1&tbnid=eYl-YifQzKPtmM:&tbnh=120&tbnw=110&ei=iQuITfWNB4mltweKipnyDQ&prev=/images%3Fq%3Dfranchise%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1 • http://www.google.com/imgres?imgurl=http://franchise.restaurants-for-sale.com/franchise_homepage.gif&imgrefurl=http://franchise.restaurants-for-sale.com/&usg=__L-c981BW7fC8UoN5aOtJnmrq4j8=&h=372&w=452&sz=96&hl=en&start=3&zoom=1&tbnid=CAlTubsqbZSMDM:&tbnh=105&tbnw=127&ei=iQuITfWNB4mltweKipnyDQ&prev=/images%3Fq%3Dfranchise%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1 8th slide • http://www.google.com/imgres?imgurl=http://sssb.k12.hi.us/Safety%2520and%2520Well%2520Being%2520Toolkit/Welcome%2520Page%2520pictures/sports.jpg&imgrefurl=http://sssb.k12.hi.us/Safety%2520and%2520Well%2520Being%2520Toolkit/safety.html&usg=__qcHBdzfwdM8ZRkXSgQi8GsHKGr8=&h=453&w=515&sz=63&hl=en&start=0&zoom=1&tbnid=Zyx8LRr6N2o3kM:&tbnh=145&tbnw=165&ei=mQyITeCGNMq4twe0rNT2DQ&prev=/images%3Fq%3Dsports%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=303&oei=mQyITeCGNMq4twe0rNT2DQ&page=1&ndsp=10&ved=1t:429,r:5,s:0&tx=76&ty=65

  18. Output DecisionsSection 2 (Cont…) Elizabeth Vazquez Economics Pd.2

  19. Monopolists • A monopolist is a person who monopolizes the selling of a product or the means of production. • Monopolists face limited choices; they can choose an output or price but they can’t choose both. • As a monopolist, you try to maximize profits but end up producing fewer goods at a higher price.

  20. Breathe Deep Meaning • Breathe Deep is a possible demand which is if someone needs a good or service for survival, they will do what it takes to buy it but if their situation is not that severe, the person will probably settle for something cheaper.

  21. Maximizing profits • To maximize a profit, a seller should set its marginal cost or the extra cost from producing that unit.

  22. In a perfect competitive market, marginal revenue is always the same as the price, each firm receives the same price no matter how much the production. In a competitive market, price would not drop ad output increased. Marginal revenue would remain the same price. l Competitive Market

  23. Marginal Revenue • When a firm has some control over price and can cut the price to sell more, marginal revenue is less than the price.

  24. Links • 1st slide: http://www.google.com/imgres?imgurl=http://aworldofprogress.com/economy/files/2010/12/monopolist.jpg&imgrefurl=http://aworldofprogress.com/economy/blaming-the-economys-victims-for-economic-crimes/monopolist/&usg=__CDw5zoGunlCBYm5rZUz5L-nhRKs=&h=277&w=380&sz=29&hl=en&start=0&zoom=1&tbnid=sqhG4q7T_iilsM:&tbnh=126&tbnw=180&ei=Y0OHTdjhGcKF0QH41cnhCA&prev=/images%3Fq%3Dmonopolist%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=297&oei=Y0OHTdjhGcKF0QH41cnhCA&page=1&ndsp=32&ved=1t:429,r:1,s:0&tx=109&ty=73 • 2nd slide: http://www.google.com/imgres?imgurl=http://www.istockphoto.com/file_thumbview_approve/4407317/2/istockphoto_4407317-medicine-cabinet-icon.jpg&imgrefurl=http://www.istockphoto.com/stock-illustration-4407317-medicine-cabinet-icon.php&usg=__IIdSMS_Y_XUTB9UNMynG08J0Pkg=&h=371&w=380&sz=54&hl=en&start=0&zoom=1&tbnid=j7GpE4ndPV2TIM:&tbnh=124&tbnw=127&ei=1ImITdOHDITC0QG0zoDfDQ&prev=/images%3Fq%3Dmedicine%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=rc&dur=63&oei=6IiITevjAq-C0QHJm8GzDg&page=1&ndsp=36&ved=1t:429,r:18,s:0&tx=123&ty=61http://www.google.com/imgres?imgurl=http://www.contactlifeline.org/images/needs.png&imgrefurl=http://www.contactlifeline.org/information_referral.html&usg=__AMqehDlo-ntYekgu1rr5sF-5wV4=&h=309&w=540&sz=65&hl=en&start=64&zoom=1&tbnid=7TDN-haUDWI6PM:&tbnh=101&tbnw=177&ei=foqITfOzM6fF0QGgsvH3DQ&prev=/images%3Fq%3Dneeds%26hl%3Den%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:10%2C1044&itbs=1&biw=1436&bih=715&iact=rc&dur=2641&oei=LIqITY-tA9GG0QHAvbXCDg&page=3&ndsp=30&ved=1t:429,r:10,s:64&tx=88&ty=51http://www.google.com/imgres?imgurl=http://www.thedailygreen.com/cm/thedailygreen/images/PV/car-save-gas-lg.jpg&imgrefurl=http://www.thedailygreen.com/environmental-news/latest/save-gas-47031702&usg=__R5FmLhXQyNX2bfPVXcgqKh_xigk=&h=360&w=460&sz=43&hl=en&start=0&zoom=1&tbnid=ogy2bc1vg_Jb_M:&tbnh=125&tbnw=160&ei=34qITbLpEeW-0QHm_dHDDg&prev=/images%3Fq%3Dgas%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=rc&dur=797&oei=34qITbLpEeW-0QHm_dHDDg&page=1&ndsp=35&ved=1t:429,r:13,s:0&tx=61&ty=45

  25. Links Cont… • 3rd slide: http://www.google.com/imgres?imgurl=http://www.net-web.com/images/services.jpg&imgrefurl=http://www.net-web.com/services.html&usg=__8xT1NerLj9HGUz-JWbQK1MhG5sY=&h=216&w=288&sz=1071&hl=en&start=28&zoom=1&tbnid=_Svt4sX9DlXaYM:&tbnh=127&tbnw=199&ei=nEKHTeyUBYuftwfe2rioDQ&prev=/images%3Fq%3Dmaximizing%2Bprofits%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=375&oei=a0KHTdGxKMy_0QG7qanfCA&page=2&ndsp=32&ved=1t:429,r:6,s:28&tx=108&ty=49 • 4th slide: http://www.google.com/imgres?imgurl=http://www.prusnyder.com/u/staticpages/2009/09/multiple-offers_4001.jpg&imgrefurl=http://www.prusnyder.com/blog/tag/the-university-of-michigan-football-stadium/&usg=__k6BYf6kVlUVRb4f-RTwVNKzpiBY=&h=268&w=400&sz=21&hl=en&start=0&zoom=1&tbnid=G9lLXWYP2GPv6M:&tbnh=125&tbnw=170&ei=ipGITe_TLo22tgfu093-DQ&prev=/images%3Fq%3Dcompetitive%2Bmarket%26hl%3Den%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=rc&dur=594&oei=ipGITe_TLo22tgfu093-DQ&page=1&ndsp=32&ved=1t:429,r:1,s:0&tx=80&ty=57http://www.google.com/imgres?imgurl=http://www.increaseonlinetraffic.info/blog/wp-content/uploads/2008/11/niche-groups.jpg&imgrefurl=http://www.increaseonlinetraffic.info/blog/increase-website-traffic/increase-website-traffic-in-todays-competitive-market/&usg=__Bmwc4q_iOozeJy95Z5RP8lfbYak=&h=300&w=400&sz=122&hl=en&start=0&zoom=1&tbnid=wbceN9B-CqcEWM:&tbnh=122&tbnw=163&ei=ipGITe_TLo22tgfu093-DQ&prev=/images%3Fq%3Dcompetitive%2Bmarket%26hl%3Den%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=hc&vpx=290&vpy=410&dur=172&hovh=194&hovw=259&tx=174&ty=175&oei=ipGITe_TLo22tgfu093-DQ&page=1&ndsp=32&ved=1t:429,r:25,s:0 • 5th slide: http://www.google.com/imgres?imgurl=https://static.flatworldknowledge.com/sites/all/files/imagecache/book/28239/fwk-rittenberg-fig10_006.jpg&imgrefurl=http://www.flatworldknowledge.com/node/28328&usg=__Yw7JfN7PAZzXzZr14a_2zTgHjYk=&h=384&w=412&sz=19&hl=en&start=0&zoom=1&tbnid=MISE8JRa9x_WMM:&tbnh=134&tbnw=145&ei=s46ITcqCIIG40QGeg5yDDg&prev=/images%3Fq%3DWhen%2Ba%2Bfirm%2Bhas%2Bsome%2Bcontrol%2Bover%2Bprice%2Band%2Bcan%2Bcut%2Bthe%2Bprice%2Bto%2Bsell%2Bmore,%2Bmarginal%2Brevenue%2Bis%2Bless%2Bthan%2Bthe%2Bprice%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=hc&vpx=665&vpy=79&dur=47&hovh=217&hovw=233&tx=150&ty=119&oei=s46ITcqCIIG40QGeg5yDDg&page=1&ndsp=28&ved=1t:429,r:3,s:0

  26. Chapter 7 Section 3

  27. most markets fall into two additional categories. Monopolistic competition and oligopoly.

  28. Monopolistic competition • Companies compete in an open market to sell products that are similar but not identical. • Each firm holds a monopoly over its own product. • Monopolistic competition is a fact for every day life. • Examples: bagel shops, ice cream stands, and gas stations.

  29. Four conditions of monopolistic competition • New firms rise quickly to join the market. • Firms don’t face high barriers to enter. • Firms have freedom to raise and lower prices because each firms goods are a little different then anyone else's. • Firms have some control over selling price because they distinguish their goods from other goods in the market. • Differentiation allows a monopolistically competitive seller to profit from their differences between their products and competitors products.

  30. Non price competition • Firms try not to compete on price alone. • The way firms distinguish their products is by offering new sizes,color,shape,texture,or taste. • Location’s important because some goods can be differentiated by where they are sold. • Some sellers can charge higher prices because they offer costumers high levels of service • Firms use advertising to create differences between their offerings and other products in the market.

  31. Links page • Monopolistic competition = info from textbook http://www.google.com/imgres?imgurl=http://cleantech.com/news/ctcfiles/uploaded_images_throug_imce/monopoly-box.jpg&imgrefurl=http://cleantech.com/news/2735/monopoly-gets-a-cleantech-makeover&usg=__aT7RARg60l_BAtPUvk7Yz3hdls8=&h=283&w=420&sz=157&hl=en&start=0&zoom=1&tbnid=0ol86D1J0JZCvM:&tbnh=125&tbnw=167&ei=TI-ITbbzE8rp0gHhvLzfDQ&prev=/images%3Fq%3Dmonopoly%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=188&oei=CI-ITcaCJYOCgAfdpODSDQ&page=1&ndsp=32&ved=1t:429,r:18,s:0&tx=112&ty=98 • Four conditions of monopolistic competition= info from textbook http://www.google.com/imgres?imgurl=http://www.spiread.com/upload/images/billboard-advertisement.jpg&imgrefurl=http://www.spiread.com/articles/2009/02/12/the-best-advertising-investment-in-a-recession&usg=__yeXoPe0JJVoUKgD2FpMTx1gPSnM=&h=363&w=494&sz=171&hl=en&start=37&zoom=1&tbnid=NsUm8ktXX9EFsM:&tbnh=122&tbnw=163&ei=nI-ITYDDCcHC0QHd4vXhDQ&prev=/images%3Fq%3Dadvertisement%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=78&oei=jY-ITfLMFoPZgAew8sXHDQ&page=2&ndsp=35&ved=1t:429,r:4,s:37&tx=108&ty=57 • Non price competition=info from textbookhttp://www.google.com/imgres?imgurl=http://phandroid.s3.amazonaws.com/wp-content/uploads/2010/01/android-market-money.jpg&imgrefurl=http://phandroid.com/2010/09/27/paid-apps-coming-to-more-countries/&usg=__tUxY-K8tRihYj9nZd3Rz15663qw=&h=479&w=479&sz=22&hl=en&start=144&zoom=1&tbnid=_PRbtJMScBlFSM:&tbnh=123&tbnw=123&ei=M5CITekXibe2B_mo5eMN&prev=/images%3Fq%3Dmarket%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=328&oei=CJCITbm-D5PUgAfRgbXHDQ&page=6&ndsp=30&ved=1t:429,r:19,s:144&tx=54&ty=62

  32. Chapter 7 Section 4

  33. Market place • Markets dominated by a few large firms tend to have higher prices and lower output than markets with many sellers • Predatory pricing is skeptical about most claims of predatory pricing because predators loses money each time it drives an endless series of rivals out of business • To control prices and output like a monopoly, the leading firms in the market can form a cartel . a cartel

  34. Government and competition • The federal government has a number of policies that keep firms from controlling the price and supply of important goods. • The government will watch closely to ensure that the firms don’t unfairly force out its competitors • The policies are called anti-trust laws because a trust is a business combination similar to cartel

  35. Regulating business practices • The government has the power to regulate all of these practices if these practices give too much power to a company that already has few competitors

  36. Breaking up monopolies • The government uses antitrust legislation laws to break up existing monopolies

  37. Blocking mergers • Government has the power to prevent monopolies • The government does it by blocking company mergers that might reduce competition and used to raise prices • Mergers occur when a company joins with another company or companies to a form a singular firm

  38. Preserving incentives • When companies try to prove that the merger would lower costs and consumer prices

  39. Links and information Market place slide =information from textbook and graphics=http://www.google.com/imgres?imgurl=http://media-cdn.tripadvisor.com/media/photo-s/01/12/3b/e5/market-place.jpg&imgrefurl=http://www.tripadvisor.com/LocationPhotos-g187785-d236460-Hotel_Garibaldi_Naples-Naples_Campania.html&usg=__6zCKIGIQ4PRTYe9-XHdvXBCEKLs=&h=411&w=550&sz=73&hl=en&start=0&zoom=1&tbnid=42Blk_6OkgzrcM:&tbnh=136&tbnw=167&ei=co6ITbn5PIiP0QHfqY2nDg&prev=/images%3Fq%3Dmarket%2Bplace%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=719&oei=co6ITbn5PIiP0QHfqY2nDg&page=1&ndsp=21&ved=1t:429,r:0,s:0&tx=105&ty=75 Government and competition slide= information from textbook and graphic=http://www.google.com/imgres?imgurl=http://www.lifesip.com/images/competition-7.gif&imgrefurl=http://www.lifesip.com/perfect-competition.html&usg=__Kj2ZBS8zD0wTq0d54x4NkUvJWNE=&h=349&w=486&sz=6&hl=en&start=0&zoom=1&tbnid=s3bCb1SbKr8OPM:&tbnh=131&tbnw=180&ei=fI-ITafxEZS40QGjkLm4Dg&prev=/images%3Fq%3Dcompetition%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=109&oei=fI-ITafxEZS40QGjkLm4Dg&page=1&ndsp=32&ved=1t:429,r:1,s:0&tx=121&ty=75,,,, http://www.google.com/imgres?imgurl=http://thesmartbusinessnetworker.com/wp-content/uploads/competition.jpg&imgrefurl=http://thesmartbusinessnetworker.com/blog/2010/08/05/4-easy-ways-to-kick-start-your-business-using-host-beneficiary-strategies/&usg=__UPX4isHb6SbJnd7GyfvlydM78fU=&h=285&w=425&sz=43&hl=en&start=0&zoom=1&tbnid=9yWsSxsw6oOr3M:&tbnh=123&tbnw=166&ei=rY-ITcPpH8SK0QHlqPW3Dg&prev=/images%3Fq%3Dbusiness%2Bcompetition%26um%3D1%26hl%3Den%26sa%3DX%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=532&oei=rY-ITcPpH8SK0QHlqPW3Dg&page=1&ndsp=32&ved=1t:429,r:6,s:0&tx=74&ty=52

  40. Links and information con. • Regulating business practice slide= information from book and graphics =http://www.google.com/imgres?imgurl=http://www.hookingupsmart.com/wp-content/uploads/2010/06/LorenzanaSuit.jpg&imgrefurl=http://www.hookingupsmart.com/2010/06/03/hookinguprealities/was-debrahlee-lorenzana-fired-for-giving-her-pervy-boss-an-erection/&usg=__r6tjzswccTq5gFDCCGpqvNlUTT8=&h=535&w=565&sz=32&hl=en&start=0&zoom=1&tbnid=l4RlToPoFHlkWM:&tbnh=143&tbnw=142&ei=iZCITZTSAtGhtwfivaXnDQ&prev=/images%3Fq%3Dhot%2Bgirls%2Bin%2Bbusiness%2Bsuits%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=531&oei=iZCITZTSAtGhtwfivaXnDQ&page=1&ndsp=37&ved=1t:429,r:4,s:0&tx=87&ty=88 • Breaking up monopolies slide=information from book and graphics=http://www.google.com/imgres?imgurl=http://www.toamillion.com/blog/wp-content/monopoly.jpg&imgrefurl=http://www.opencongress.org/articles/view/1250-New-Bill-Would-BreakUpHealthInsuranceMonopolies&usg=__LbnnzJXM1bYUbJsR9ezT5YbkD4s=&h=440&w=433&sz=53&hl=en&start=0&zoom=1&tbnid=SdTk8zDiUJc9M:&tbnh=130&tbnw=128&ei=nJGITdmXKNC3tgecl4DuDQ&prev=/images%3Fq%3Dbreaking%2Bup%2Bmonopolies%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=1072&vpy=394&dur=1562&hovh=226&hovw=223&tx=112&ty=179&oei=nJGITdmXKNC3tgecl4DuDQ&page=1&ndsp=31&ved=1t:429,r:29,s:0 • Blocking mergers slide= information from book and graphics=http://www.google.com/imgres?imgurl=http://blogs.ft.com/beyond-brics/files/2010/10/metlife.jpg&imgrefurl=http://blogs.ft.com/beyond-brics/2010/10/06/why-is-taiwan-blocking-mergers-and-acquisitions/&usg=__QE6NvZVY964fxRJYsd1EvghIGGI=&h=122&w=170&sz=4&hl=en&start=0&zoom=1&tbnid=Hc3M73eP6XlO1M:&tbnh=97&tbnw=136&ei=dJKITfPYFoSUtwew2fiUBw&prev=/images%3Fq%3Dblocking%2Bmergers%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=312&oei=dJKITfPYFoSUtwew2fiUBw&page=1&ndsp=29&ved=1t:429,r:0,s:0&tx=100&ty=59,,, • http://www.google.com/imgres?imgurl=http://www.foodandtechconnect.com/site/wp-content/uploads/2011/01/building-blocks.jpg&imgrefurl=http://www.foodandtechconnect.com/site/2011/01/04/business-model-building-blocks-join-the-conversation-win-business-coaching/&usg=__DrteQn1cGr570uzmArdVfNZbCyM=&h=260&w=300&sz=29&hl=en&start=0&zoom=1&tbnid=LgJ9fGwMOCYGVM:&tbnh=122&tbnw=147&ei=iJKITZD1DdO2twfcy6jdDQ&prev=/images%3Fq%3Dblocks%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=359&oei=iJKITZD1DdO2twfcy6jdDQ&page=1&ndsp=32&ved=1t:429,r:9,s:0&tx=106&ty=71

  41. Con.. • Preserving incentives= informationg from textbook and graphics =http://www.google.com/imgres?imgurl=http://www.thehindu.com/multimedia/dynamic/00007/TIGER_7352e.jpg&imgrefurl=http://www.thehindu.com/news/national/article31350.ece&usg=__umJ_hkSX56wNYB8cmDpb7bSiBr8=&h=401&w=318&sz=28&hl=en&start=0&zoom=1&tbnid=BQciqUe_qmjLeM:&tbnh=130&tbnw=103&ei=ZpOITcvCDMagtgftmKQm&prev=/images%3Fq%3Dpreserving%2Bincentives%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26tbs%3Disch:10%2C215&um=1&itbs=1&iact=hc&vpx=296&vpy=136&dur=390&hovh=252&hovw=200&tx=116&ty=134&oei=ZpOITcvCDMagtgftmKQm&page=1&ndsp=31&ved=1t:429,r:16,s:0&biw=1420&bih=715

  42. End (:

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