Chapter 7
Jean Acevedo
Anthony martinez
Nermin sener
Elizabeth vasquez
Ishmel bolano
Fernando banchon
Chapter 7, Section 1
BY:ISHMEL BOLANO
2ND PERIOD
MS.MITAT
3-23-11
Section 1, :Perfect Competition
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.
www.pearsonsuccessnet.com
Four Conditions for a Perfect
Competition;
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
www.pearsonsuccessnet.com
Identical Products
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.
www.pearsonsuccessnet.com
Informed Buyers and Sellers
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.
=
The time spent gathering information
must be worth the amount of money that
will be saved
www.pearsonsuccessnet.com
Free Market Entry and Exit
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
www.pearsonsuccessnet.com
the firms withdrew from the market and no one bought the
products
Barriers to Entry
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.
www.pearsonsuccessnet.com
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.
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.
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.
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.
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.
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.
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.
Links
2nd slide
http://www.google.com/imgres?imgurl=http://www.planetware.com/i/photo/people-shopping-in-thestreets-of-yangon-rangoon-mya001.jpg&imgrefurl=http://www.planetware.com/picture/myanmar-burmapeople-shopping-in-the-streets-of-yangon-rangoon-myamya001.htm&usg=__AOMP5MKzS6V5RvYhbq7nnAcQ5L8=&h=302&w=450&sz=77&hl=en&start=2&zoo
m=1&tbnid=VcSLeVQFFFGf6M:&tbnh=85&tbnw=127&ei=IAmITfPcKYKXtwegg7CJDg&prev=/images%3
Fq%3Dpeople%2Bshopping%2Bimages%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26t
bs%3Disch:1&um=1&itbs=1
3rd slide
http://www.google.com/imgres?imgurl=http://i.investopedia.com/inv/dictionary/terms/diseconomies%2520
of%2520scale.gif&imgrefurl=http://www.investopedia.com/terms/d/diseconomiesofscale.asp&usg=__BjSe
tfv5C9638hGd4tthf28NoqY=&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%26u
m%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/watimages/watertex_md.jpg&imgrefurl=http://www.chem1.com/acad/sci/aboutwater.html&usg=__zmLIj1aQjA
7yD39A8qNLf7m6oEk=&h=330&w=500&sz=35&hl=en&start=0&zoom=1&tbnid=_sNMxdXis2DVhM:&tbn
h=117&tbnw=156&ei=l4yITbCwKMXpgQf7LDODQ&prev=/images%3Fq%3Dwater%26um%3D1%26hl%3Den%26biw%3D1420%26bih%3D715%26
tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=156&oei=l4yITbCwKMXpgQf7LDODQ&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/naturalgas_4.jpg&imgrefurl=http://www.marcgunther.com/2010/11/28/natural-gas-friend-or-foe-ofsustainability/&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-scienceprojects.com/images/lightening_500x332.jpg&imgrefurl=http://www.how-things-work-scienceprojects.com/electricity-scienceprojects.html&usg=__3UeiunFbqmexBNZMBELONZIJurI=&h=332&w=500&sz=31&hl=en&start=15&zoo
m=1&tbnid=eRBkhT126yHKwM:&tbnh=86&tbnw=130&ei=SoyITdClK4nogQfYOHSDQ&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
Links cont..
5th slide
http://www.google.com/imgres?imgurl=http://www.purchaseipad2.com/wp-content/uploads/ipadapps.jpg&imgrefurl=http://www.purchaseipad2.com/&usg=__GauJYxgrUBHiXbXrBcTm5MgKoA=&h=400&w=650&sz=38&hl=en&start=7&zoom=1&tbnid=IwBMjdXdcQjKW
M:&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/AAAAAA
AAARQ/N5sdWVUfnVo/s400/stacks%252520of%252520money.jpg&imgrefurl=http://bostonmaggie.bl
ogspot.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=vJOITaLpCMq2tge
y3tXsDQ&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/wpcontent/uploads/2009/07/franchise.gif&imgrefurl=http://www.merchantservices.cc/merchant-servicesbusinessspecialties/franchises/franchises/&usg=__IgyG_zRPTOrJuOd9Ir9Ft3BZQPM=&h=350&w=322&sz=33
&hl=en&start=1&zoom=1&tbnid=eYlYifQzKPtmM:&tbnh=120&tbnw=110&ei=iQuITfWNB4mltweKipnyDQ&prev=/images%3Fq%3Dfranchi
se%26um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1
http://www.google.com/imgres?imgurl=http://franchise.restaurants-forsale.com/franchise_homepage.gif&imgrefurl=http://franchise.restaurants-for-sale.com/&usg=__Lc981BW7fC8UoN5aOtJnmrq4j8=&h=372&w=452&sz=96&hl=en&start=3&zoom=1&tbnid=CAlTubsqb
ZSMDM:&tbnh=105&tbnw=127&ei=iQuITfWNB4mltweKipnyDQ&prev=/images%3Fq%3Dfranchise%2
6um%3D1%26hl%3Den%26biw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1
th
8 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=__qcHBdzfwdM8ZRkXSgQi8GsHK
Gr8=&h=453&w=515&sz=63&hl=en&start=0&zoom=1&tbnid=Zyx8LRr6N2o3kM:&tbnh=145&tbnw=16
5&ei=mQyITeCGNMq4twe0rNT2DQ&prev=/images%3Fq%3Dsports%26um%3D1%26hl%3Den%26b
iw%3D943%26bih%3D494%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=303&oei=mQyITeCGNMq4
twe0rNT2DQ&page=1&ndsp=10&ved=1t:429,r:5,s:0&tx=76&ty=65
Output Decisions
Section 2 (Cont…)
Elizabeth Vazquez
Economics
Pd.2
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.
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.
Maximizing profits
To maximize a profit, a seller should set
its marginal cost or the extra cost from
producing that unit.
Competitive Market
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
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.
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-economiccrimes/monopolist/&usg=__CDw5zoGunlCBYm5rZUz5LnhRKs=&h=277&w=380&sz=29&hl=en&start=0&zoom=1&tbnid=sqhG4q7T_iilsM:&tbnh=126&tbnw=180&ei=Y0OHTdjhGc
KF0QH41cnhCA&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_44073
17-medicine-cabinet-icon.jpg&imgrefurl=http://www.istockphoto.com/stock-illustration-4407317-medicine-cabineticon.php&usg=__IIdSMS_Y_XUTB9UNMynG08J0Pkg=&h=371&w=380&sz=54&hl=en&start=0&zoom=1&tbnid=j7GpE4nd
PV2TIM:&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=6IiITevjAqC0QHJm8GzDg&page=1&ndsp=36&ved=1t:429,r:18,s:0&tx=123&ty=61
http://www.google.com/imgres?imgurl=http://www.contactlifeline.org/images/needs.png&imgrefurl=htt
p://www.contactlifeline.org/information_referral.html&usg=__AMqehDlo-ntYekgu1rr5sF5wV4=&h=309&w=540&sz=65&hl=en&start=64&zoom=1&tbnid=7TDNhaUDWI6PM:&tbnh=101&tbnw=177&ei=foqITfOzM6fF0QGgsvH3DQ&prev=/images%3Fq%3Dneeds
%26hl%3Den%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:10%2C1044&itbs=1&b
iw=1436&bih=715&iact=rc&dur=2641&oei=LIqITYtA9GG0QHAvbXCDg&page=3&ndsp=30&ved=1t:429,r:10,s:64&tx=88&ty=51
http://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-gas47031702&usg=__R5FmLhXQyNX2bfPVXcgqKh_xigk=&h=360&w=460&sz=43&hl=en&start=0&zoo
m=1&tbnid=ogy2bc1vg_Jb_M:&tbnh=125&tbnw=160&ei=34qITbLpEeW0QHm_dHDDg&prev=/images%3Fq%3Dgas%26hl%3Den%26sa%3DG%26biw%3D1436%26bih%3
D715%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=rc&dur=797&oei=34qITbLpEeW0QHm_dHDDg&page=1&ndsp=35&ved=1t:429,r:13,s:0&tx=61&ty=45
Links Cont…
3rd slide: http://www.google.com/imgres?imgurl=http://www.netweb.com/images/services.jpg&imgrefurl=http://www.net-web.com/services.html&usg=__8xT1NerLj9HGUzJWbQK1MhG5sY=&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&p
age=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/multipleoffers_4001.jpg&imgrefurl=http://www.prusnyder.com/blog/tag/the-university-of-michigan-footballstadium/&usg=__k6BYf6kVlUVRb4fRTwVNKzpiBY=&h=268&w=400&sz=21&hl=en&start=0&zoom=1&tbnid=G9lLXWYP2GPv6M:&tbnh=125&tbnw=170&ei=i
pGITe_TLo22tgfu093DQ&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=57
http://www.google.com/imgres?imgurl=http://www.increaseonlinetraffic.info/blog/wp-content/uploads/2008/11/nichegroups.jpg&imgrefurl=http://www.increaseonlinetraffic.info/blog/increase-website-traffic/increase-website-traffic-in-todays-competitivemarket/&usg=__Bmwc4q_iOozeJy95Z5RP8lfbYak=&h=300&w=400&sz=122&hl=en&start=0&zoom=1&tbnid=wbceN9BCqcEWM:&tbnh=122&tbnw=163&ei=ipGITe_TLo22tgfu093DQ&prev=/images%3Fq%3Dcompetitive%2Bmarket%26hl%3Den%26biw%3D1436%26bih%3D715%26gbv%3D2%26tbs%3Disch:1&it
bs=1&iact=hc&vpx=290&vpy=410&dur=172&hovh=194&hovw=259&tx=174&ty=175&oei=ipGITe_TLo22tgfu093DQ&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/fwkrittenbergfig10_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%3F
q%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%3D7
15%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=hc&vpx=665&vpy=79&dur=47&hovh=217&hovw=233&tx=150&ty=119&oei=s46ITcqCI
IG40QGeg5yDDg&page=1&ndsp=28&ved=1t:429,r:3,s:0
Chapter 7
Section 3
most markets fall into two additional categories.
Monopolistic competition and oligopoly.
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.
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.
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.
Links page
Monopolistic competition = info from textbook
http://www.google.com/imgres?imgurl=http://cleantech.com/news/ctcfiles/uploaded_images_throug_imce/monopolybox.jpg&imgrefurl=http://cleantech.com/news/2735/monopoly-gets-a-cleantechmakeover&usg=__aT7RARg60l_BAtPUvk7Yz3hdls8=&h=283&w=420&sz=157&hl=en&start=0&zoom=1&tbnid=0ol86D1J0JZCvM:&tbn
h=125&tbnw=167&ei=TIITbbzE8rp0gHhvLzfDQ&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=CIITcaCJYOCgAfdpODSDQ&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/billboardadvertisement.jpg&imgrefurl=http://www.spiread.com/articles/2009/02/12/the-best-advertising-investment-in-arecession&usg=__yeXoPe0JJVoUKgD2FpMTx1gPSnM=&h=363&w=494&sz=171&hl=en&start=37&zoom=1&tbnid=NsUm8ktXX9EFs
M:&tbnh=122&tbnw=163&ei=nIITYDDCcHC0QHd4vXhDQ&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=jYITfLMFoPZgAew8sXHDQ&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/wpcontent/uploads/2010/01/android-market-money.jpg&imgrefurl=http://phandroid.com/2010/09/27/paidapps-coming-to-more-countries/&usg=__tUxYK8tRihYj9nZd3Rz15663qw=&h=479&w=479&sz=22&hl=en&start=144&zoom=1&tbnid=_PRbtJMScBl
FSM:&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=32
8&oei=CJCITbm-D5PUgAfRgbXHDQ&page=6&ndsp=30&ved=1t:429,r:19,s:144&tx=54&ty=62
Chapter 7 Section 4
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
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 antitrust laws because a trust
is a business combination
similar to cartel
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
Breaking up monopolies
The government
uses antitrust
legislation laws to
break up existing
monopolies
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
Preserving incentives
When companies
try to prove that the
merger would
lower costs and
consumer prices
Links and information
Market place slide =information from textbook and
graphics=http://www.google.com/imgres?imgurl=http://media-cdn.tripadvisor.com/media/photos/01/12/3b/e5/market-place.jpg&imgrefurl=http://www.tripadvisor.com/LocationPhotos-g187785-d236460Hotel_Garibaldi_Naples-Naples_Campania.html&usg=__6zCKIGIQ4PRTYe9XHdvXBCEKLs=&h=411&w=550&sz=73&hl=en&start=0&zoom=1&tbnid=42Blk_6OkgzrcM:&tbnh=136&tb
nw=167&ei=co6ITbn5PIiP0QHfqY2nDg&prev=/images%3Fq%3Dmarket%2Bplace%26um%3D1%26hl%3
Den%26sa%3DG%26biw%3D1420%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=719&o
ei=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/competition7.gif&imgrefurl=http://www.lifesip.com/perfectcompetition.html&usg=__Kj2ZBS8zD0wTq0d54x4NkUvJWNE=&h=349&w=486&sz=6&hl=en&start=0&zoo
m=1&tbnid=s3bCb1SbKr8OPM:&tbnh=131&tbnw=180&ei=fIITafxEZS40QGjkLm4Dg&prev=/images%3Fq%3Dcompetition%26um%3D1%26hl%3Den%26biw%3D142
0%26bih%3D715%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=109&oei=fIITafxEZS40QGjkLm4Dg&page=1&ndsp=32&ved=1t:429,r:1,s:0&tx=121&ty=75,,,,
http://www.google.com/imgres?imgurl=http://thesmartbusinessnetworker.com/wpcontent/uploads/competition.jpg&imgrefurl=http://thesmartbusinessnetworker.com/blog/2010/08/05/4-easyways-to-kick-start-your-business-using-host-beneficiarystrategies/&usg=__UPX4isHb6SbJnd7GyfvlydM78fU=&h=285&w=425&sz=43&hl=en&start=0&zoom=1&tb
nid=9yWsSxsw6oOr3M:&tbnh=123&tbnw=166&ei=rYITcPpH8SK0QHlqPW3Dg&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=rYITcPpH8SK0QHlqPW3Dg&page=1&ndsp=32&ved=1t:429,r:6,s:0&tx=74&ty=52
Links and information con.
Regulating business practice slide= information from book and graphics
=http://www.google.com/imgres?imgurl=http://www.hookingupsmart.com/wpcontent/uploads/2010/06/LorenzanaSuit.jpg&imgrefurl=http://www.hookingupsmart.com/2010/06/03/hookinguprealities/was-debrahleelorenzana-fired-for-giving-her-pervy-boss-anerection/&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/wpcontent/monopoly.jpg&imgrefurl=http://www.opencongress.org/articles/view/1250-New-Bill-WouldBreakUpHealthInsuranceMonopolies&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%3Dbreak
ing%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=nJGITdmXKNC3tgecl
4DuDQ&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/beyondbrics/2010/10/06/why-is-taiwan-blocking-mergers-andacquisitions/&usg=__QE6NvZVY964fxRJYsd1EvghIGGI=&h=122&w=170&sz=4&hl=en&start=0&zoom=1&tbnid=Hc3M73eP6XlO1M:&t
bnh=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/buildingblocks.jpg&imgrefurl=http://www.foodandtechconnect.com/site/2011/01/04/business-model-building-blocks-join-the-conversation-winbusinesscoaching/&usg=__DrteQn1cGr570uzmArdVfNZbCyM=&h=260&w=300&sz=29&hl=en&start=0&zoom=1&tbnid=LgJ9fGwMOCYGVM:&t
bnh=122&tbnw=147&ei=iJKITZD1DdO2twfcy6jdDQ&prev=/images%3Fq%3Dblocks%26um%3D1%26hl%3Den%26biw%3D1420%26bi
h%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&t
x=106&ty=71
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=/im
ages%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=ZpOITcvCDM
agtgftmKQm&page=1&ndsp=31&ved=1t:429,r:16,s:0&biw=1420&bih=715
End (: