Applied Economics quarter 1-module5, Cheat Sheet of Earth science

Download Applied Economics quarter 1-module5 and more Cheat Sheet Earth science in PDF only on Docsity! pr NG RePeusLiic OF THE PHILIPPINES { Sci, DEPARTMENT. QF & IUCATION 3, PANGASINAN _DIvIsION II CANARVACANAN, BINALONAN, PANGASINAN Senior High School APPLIED ECONOMICS MELC: Differentiate Various Market Pricing on Economic Decision ABM_AE12-Ie-h-7 MODULES5 Objective: Differentiate market structures in terms of: a. Number of sellers b. types of products c. entry/exit to market d. pricing power Prepared by: VENUS A. VIADO SHS- TII Pre-Test This will help you to differentiate various market structures, do not be afraid about the result of this test, what is important is for you to do you best. Directions: Multiple choice: Choose the letter of the correct answer. Write it down on the space provided for in each item. 1. What is the ideal market structure? A. Monopolistic competition C. Oligopoly B. Monopoly D. Perfect competition 2. Which of the following market types has the fewest number of firms? ——— A. Monopolistic competition C. Oligopoly B. Monopoly D. Perfect competition 3. What is the difference between perfect competition and monopolistic competition? —— A. In perfect competition , firms produce identical products, while in monopolistic competition does not. B. Perfect competition has a large number of small firms while monopolistic competition does not. C. Perfect competition has barriers to entry while monopolistic competition dos not. D. Perfect competition has no barriers to entry while monopolistic competition does not. 4. Which of the following is the best example of a perfectly competitive market? —__ A. _ Athletic shoes C. Farming B. Diamonds D. Soft drinks 5. Why is perfect competitive firms are considered as price takers? ——. A. Each firm is very large B. Many other firms produce identical products. C. Their Demand curves are downward sloping. D. There are no good substitutes for their products. 6. Why do firms use marketing? —_— A. Convince customers that their products are worth the price. B. Influence a consumer’s buying decision. C. Persuade buyers that their products is superior than others. D. All of these. 7. What consist of differentiated products? ——_ A. Close but not perfect substitutes B. Many perfect substitutes C. No close substitutes D. No substitutes of any kind 8. In monopolistic competition, each firm supplies a small part of the market. This — occurs because : A. firms produce differentiated products. What is Monopolistic Competition? Monopolistic competition occurs when a large number of firms price and sell differentiated products that are close substitutes to each other. Features of Monopolistic Competition The following are features of monopolistic competition. 1. Many firms: There is relatively large number of firms in the market. Such firms produce close substitutes and compete with each other. Stiff competition exists between firms and they share market demand. 2. Product differentiation: the products produced are not identical. They are slightly different from each other. Despite this, they remain close substitutes, therefore, their prices are similar. 3. Freedom of entry and exit: As in perfect competition, businesses have freedom to enter and exit an industry. When existing firms make super profits, the new firms enter the industry to produce close substitutes and exit once these super profits are no longer available. Because of this firms in the market earn normal profits in the long run. 4. Non-price competition: Business use means other than price to complete. This is a common feature in monopolistic competition, so companies spend a large amount of money What is Oligopoly? An oligopoly is a market dominated by a few large firms. It falls between a monopoly and monopolistic competition. In this market, a small number of firms account for a large proportion of output and employment. Firms within the oligopoly produce branded yy and each seller competes with the others. The actions of one firm can influence the actions of its competitors. This is called rivalry. Advertising and marketing are important features of competition. A high degree of dependence exists among the businesses in their decision making: firms in the market react to the behavior of their competitors. They compete for market share using price and non-price competition. Price competition involves discounts. Non-price competition includes special services to customers such as loyalty cards, home deliveries, extensions of opening hours, special offers and entertainment facilities in shopping outlets. High entry barriers exist because existing firms have achieved economies of scale. Features of Oligopoly Market 1. A relatively small number of firms in the industry that dominate the market. 2. Differentiated products 3. Mutual interdependence of businesses 4. Relatively high barriers to entry due to economies of scale 5. Businesses in the market earn super profits in the long run Examples of oligopolies include: - Nike and Reebok- sports shoe products - Coca Cola and Pepsi — soft drinks What is Monopoly? In a monopoly market a single producer or seller of a product that has no close substitutes controls the market. This is the least competitive situation, so itis very hard for a true monopoly to exist. A monopolist has no competitors. Features of Monopoly The following are the features of a monopoly market. 1. Strong bartiers to entry. It is usually very difficult to keep others out of a market which is capable of earing super profit, such as a monopoly. Government intervention may be needed in the form of legal barriers. Other legal barriers may be formed by the use patents. Financial barriers, due to a very high capital set-up cost, may also exist, giving rise to a natural monopoly. 2. Imperfect knowledge 3. No advertising. There is no need to defer customers away from a competitor, as there is no close substitute good or service. 4. One seller 5. The sole seller offers a product for which there is no close substitute. 6. Strong control over price or quantity. Practice test Directions: This activity connects supply and demand to the real world. Students will read articles that show changes in supply or demand, or simply analyze the articles’ summaries and translate the content to the analysis of demand, supply, quantity demanded and quantity supplied, and market equilibrium. Real World Connections: Supply and Demand Student Worksheet Remember that all changes are other things being equal. 1. DVD sales are sliding because more consumers are watching content digitally. (This involves two markets.) Article: https://www. bloomberg.com/news/articles/2015- 01-06/u-s- dvd-sales-continue- to-slide-as- digital viewing-soars Market What Demand Supply Curve Equilibrium changed? Shift Price and Quantity DVD Number of buyers (decrease) Number of buyers Digital (increase) Content 2. Consumers become more health conscious and reduce their consumption of donuts. Article: : newsmax.com/health/Health-News/sugary- processed- foodspastries/2014/12/29/id/615359/ Market What Demand Supply Curve Equilibrium changed? Shift Price and Quantity Donuts Number of buyers Reference: https://www.frbatlanta.org/-/media/documents/education/publications/extra- credit/2015/fall/lessons-and-activities/high-school/microeconomics/supply-and-demand- activity/extra-credit_supply-and-demand-infographic_activity.pdf Practice Test You are now ready to share what you have learned Directions: Do not be afraid to voice out your ideas future entrepreneurs. 1. What is market? Answer Key: Pre-test answer: 1. D 2. C 3. A 4. D S.A 6. D 7. B 8 B 9 A 10.A 1. DVD sales are sliding because more consumers are watching content digitally. (This involves two markets.) Market What Demand Supply Curve Shift | Equilibrium changed? Price and Quantity DVD Number of] Decreased | No change | Demand to | Equilibrium buyers left price and (decrease) quantity fall Number of | Increased No change | Demand to | Equilibrium buyers tight price and Digital . oe increase quantity rise G ) tity Content 1. Consumers become more health conscious and reduce their consumption of donuts Market What Demand Supply Curve Shift | Equilibrium changed? Price and Quantity Donuts Number of} Decreased | No change | Demand to } Both buyers left decrease References: Case, Karl E. & Fair, Ray C. (19990. Principles of Economics. (5" ed.). Prentice Hall, ISBN 0-13-961905-4 Castillo, Andres V. Philippine Economics. Revised Edition, Manila, 1989 Leano, Jr. Roman, Applied Economics for Senior high School. Mindshapers Co., INC. Manila, 2016