Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

• Class : y10

• Lesson Topic: Competitive Markets

• Scheme of Work: Business Economics Part 2 COMPETITION

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Lesson Objectives P&DPlanning and

Data

ALL (KNOWLEDGE) Define and describe the terms for a competitive market

MOST (ANALYSIS) Examine and Analyse the concepts of a competitive market

SOME (EVALUATION )

Evaluate the pros and cons & Justify your views if competition is favourable

Higher thinking

Skills

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Planning ToolsP&DPlanning and

Data

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Define and describe the terms for a competitive market[Grade E-D]

Examine and Analyse the concepts of a competitive market

[Grade C-B]

Evaluate the pros and cons & Justify your views if competition is favourable

[Grade A-A*]

Personalise your learning. . .

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Keyword Definition

Firm

Barriers to Entry

Competition

Monopoly

Oligopoly

Product Differentiation

Innovation

CONNECTIVES

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

CONNECTIVES for AnalysisCONNECTIVES for ApplicationCONNECTIVES for Evaluation

COMPARINGEqually…As with…Like…In the same way…Similarly…Even so…Likewise…CAUSE & EFFECT

Consequently… Due to…As a result… Therefore..Because of… Because…

CONCLUDINGFirstly… After…Secondly… Before…Overall… I believe…Finally… I think …In conclusion… it depends…To conclude… short term…Meanwhile… Long term…

CONTRASTINGAlthough… Except…Moreover… If…However… Yet…Apart from… Unless…Despite… As long as…

EMPHASISINGMost importantly…Significantly…Notably…Especially…Above all…In particular…Indeed…

QUALIFYINGDespite… Yet…As long as… Unless…Apart from… If…Moreover… Except…However… Although…

ADDINGIn addition… And…Too… Also…Additionally… As well as…Furthermore…

ILLUSTRATINGFor instance… Such as…In the case of… So…For example…As revealed by…As illustrated by…

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Climb the LadderA-A*

1. To what extent 2. Do you think3. Evaluate whether (10m) 10+ connectives & key words

C-B

1. Explain 2. Compare3. Analyse (5-9m) 5+ connectives & key words

E-D

1. Define 2. Describe3. Identify (2-4m) 2 + connectives & key words

ATDApply to

demonstrate

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Recap Economies of Scale

COMPLETE TABLE…

Internal External

Economy of Scale

Lowering of ______ _______ as firm _______. 5 types are:

Diseconomy of Scale

Not Aplicable

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

You have choice of setting up a fruit stall in market or oil company! Which is easier?

Which is less costly to setup?

Which has more government regulation?

Which has potential economies of scale?

Which is more profitable?

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Opening your own oil/petrol company

There are massive barriers to entry in opening an oil company:• Massive costs of drilling for oil.• Capital investment required.• Purchase of land to drill• Government rules to follow• Advertising and distribution world wideBARRIERS TO ENTRY ARE DIFFICULTIES WHICH STOP NEW FIRMS ENTERING A MARKET..

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Opening your own fruit stall• This on the other hand is much easier to do.

• Capital investment only requires some working capital, maybe a stall and a location in a market.

• Government rules are less of a problem and costs are much reduced.

• BARRIERS TO ENTRY ARE LOW! THEREOFRE NEW FIRMS ENTER THE MARKET EASILY.

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

BARRIERS TO ENTRY

• Low barriers to entry = More competition.

• There could be thousands of fruit stalls in a country but only a handful of oil companies.

• High barriers to entry = Less competition!

• Is competition good?

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

A Competitive Market • A competitive market has low barriers to entry • New firms can enter the market easily• High degree of firms in market (competitive)• Products are similar therefore little product differentiation. • Firms have little control over price (So many)• Prices are driven low for everyone.

Think of a farmer selling wheat….

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

How does competition affect everyone?Consumer Firms Society

Prices Satisfied with low prices.

Low prices to attract customers.

Effective price mechanism allocation.

Costs / Profit

Costs / Profit low to keep prices low.

Efficiency Efficient allocation of resources for everyone.

Innovation Low profits means less capital for firms to reinvest in new products.

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

30 Secs – How many firms can you remember?

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Apply learning • Think of the industries below and assess with your partner the

degree of competition. Is it competitive or not and why not?

• Sports brands• Supermarkets • Cars• Fast food• Clothes

• Which firm faces MOST / LEAST competition ?• Which firm has HIGH / LOW PRICES ?

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Questions

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Perfect Competition

Pure Monopoly

Monopolistic Competition Oligopoly Duopoly Monopoly

The further right on the scale, the greater the degree of monopoly power exercised by the firm.

Lots of CompetitionCompetitive Prices

No CompetitionHigh Prices

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Lesson Objectives P&DPlanning and

Data

ALL (KNOWLEDGE) Define and describe the terms for a competitive market

MOST (ANALYSIS) Examine and Analyse the concepts of a competitive market

SOME (EVALUATION )

Evaluate the pros and cons & Justify your views if competition is favourable

Higher thinking

Skills

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

A-A*

1. To what extent 2. Do you think3. Evaluate whether (10-14m)

C-B

1. Explain 2. Compare3. Analyse (5-9m)

E-D

1. Define 2. Describe3. Identify (2-4m)

ATDApply to

demonstrate Apply to Demonstrate Review the Learning

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Pass the ParcelAdd as much information you can remember from today’s lesson

When the horn blows – pass your sheet to the next table!

RReview the

Learning

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Neighbours

2 things your neighbour has learnt today

1 question your neighbour wants

to ask

RReview the

Learning

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

Summarise your learning today into a single tweet

140 characters

Keep all of the information

Tweet Tweet

STOP

RReview the

Learning

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

1 questionyou need to ask

2 new things you learnt

3 pieces of information

RReview the

Learning

Economics Section: Competitive Markets Further Reading. Chp 22

Keywords – Firms, competition , barriers to entry , innovation , product differentiation, monopoly.

5 minutes. . . GO

STOP