SECTION
Before You Learned Producers and consumers interact to determine equilibrium price, which can change with changes in supply and changes in demand, sometimes leading to surpluses or shortages.
AS YOU READ Ta k e notes to help you understand the how the price system works and how prices act as signals and incentives to both producers and consumers.
1. Definition
Competitive Pricing
2. Example
VOCABULARY HUNT Circle each term where it appears in your notes and be sure you understand its meaning. I f a term does not appear, write it beside the box where it best belongs. Copyright C) McDougal LineII/Houghton
competitive pricing
incentive
Name
IkES'Utitc14,ADAMs, 3 1 1 1 MID 4 ctimPtITEIL GeEp_. 1 ntE yEsetolci+ 0 E U L P D 1 T 2 v a 0 .._..--1 s ) O K N T M ' Harley Schwadron/www.CartoonStock.com A S K S I 7. Reread your notes on "How the Price System Works" and "Price Motivates Producers M N A the people in the cartoon as either producers or consumers. and Consumers." Label G L 8. What is the customary Lrelationship between the size of a product and its price? How does this help explain the ironic humor of the cartoon?
effuJ/1142,
Copyright 0
Name
SECTION
AS YOU READ Ta k e notes listing the characteristics of perfect competition. Use the cluster diagram on this page of the worksheet.
Independent
Standardized
Knowledgeable
Characteristics
Enter/Exit
1
Many
\ I
of Perfect Competition
A;
iM
R U
e n
d i
n t
c t a Name D a l 4 1 IS PERFECT COMPETITION?, CONTINUED WHAT , VOCABULARY HUNT Write the letter of the term that best matches the description. I. A business that accepts the market price determined by supply and demand 2. Occurs in markets with few sellers or products that are not alike 3. The ideal model of a market economy 4 . A n economicmodelo f competition within the same industry
4 1 $ 9 . r, , , 7 ;(rfel ' 1
C P It
. N
' I t i t t b '''
;''. h i l . 1 4 N : f Many buyers and sellers A t i ' l Standardized product t i ' a t a t e to enter and leave the market aFreedom t i t i t t r i Independent t action r a i l eWell-informed l l i buyers and sellers
5. Complete the chart. Check the characteristics that each market has at all times. 6. Which characteristic is sometimes missing in both markets?
Copyright
7: Market Structures
Name
4 1
alrre *
Date
SECTION
Before You Learned Perfect competition is the most competitive market structure.
AS YOU READ Ta k e notes listing the characteristics of different types of monopolies. Use the chart below and on the next page of this worksheet.
One Seller
Natural Monopoly
Restricted Market
Control of Prices
Government Monopoly
Technological Monopoly
Geographic Monopoly
VOCABULARY HUNT Circle each term where it appears in your notes and be sure you understand its meaning. I f a term does not appear, write it in or next to the box where it best belongs. monopoly price maker natural monopoly technological monopoly economies of scale cartel barrier to entry government monopoly geographic monopoly patent
r" -
Name
C Clive Goddard/www.CartoonStock.com 13. Circle the word in the cartoon indicating that the cottage represents a monopoly. 14. Why are similar properties unlikely to be available?
E C
o h
n a
o p
i t
c e
: r