Ch. 7.1 Notes: Four Market Structures I.Market Structures = 4 Types of Industries where companies compete : A. Monopolistic Competition > industry with many competing firms 1. no one dominates 2. firms can enter/exit industry easily 3. firms sell similar products, not identical 4. prices are set close to competitors at your level $19,650 Dodge Challenger $21,320 Ford Mustang Mitsubishi Eclipse $20,099 Chevrolet Corvette $47,045 5. product differentiation > companies try to make their product special compared to others B. Oligopoly > industry with a few (2 to 4) dominant firms 1. hard for new firms to enter 2. similar products, not same 3. firms will copy each other 4. price wars may occur > firms match each others price cut 5. more advertising C. Pure Competition > same as Monopolistic Competition, except products sold are identical 1. not common in the U.S. 2. Ex. fruits, rice, sugar D. Monopoly > industry with one dominant firm. 1. New firms face difficult entry. Computer Systems MP3 Players 71% 11% 4% 92% 5% 1% 1. U.S. laws discourage monopolies. Why? a. can greatly influence price 2. 4 types of sub monopolies: a. Government Monopoly > when the gov is the only provider/seller b. Geographic Monopoly > when your location creates a monopoly c. Natural Monopoly > when gov determines it is best to have one firm d. Technological Monopoly > when you invent/create something and you get exclusive rights II. Protecting original work A. Patent = protects inventions iPhone 2.0 clamshell patent B. Copyright = protects expression(music, art, writings) Artists Sued for Copyright Infringement C. Trademark = protects phrases and logos to promote your product You can do it. We can help. Lets get ready to Rumble! Thats Hot! Funny Patents DMV Qss.com/driving-test-sample-questions/images/driving-test-sample- questions- scenario4.gif&imgrefurl=http://www.bestsamplequestions.com/driving- test-sample-questions/driving-test-sample-questions- 12.html&h=348&w=350&sz=17&hl=en&start=13&um=1&tbnid=hEHAgM V9uSU5mM:&tbnh=119&tbnw=120&prev=/images%3Fq%3D%2Bdmv% 2Bexam%2Bquestions%26um%3D1%26hl%3Den%26safe%3Dactive >>>> top selling phones in U.S. 2009