Download TASK 3.79. Read the text and complete the exercises that follow.

FUNDAMENTALS OF ECONOMICS
TYPES OF MARKET
TASK 3.79. Read the text and complete the exercises that follow.
to assess
an assumption
to bar
prohibition
homogeneous
to comprise
оцінювати
припущення
перешкоджати
заборона
однорідний
займати, охоплювати
to approach
tiny
to intervene
permissible
government official
a bribe
(тут) наближатися до
крихітний
втручатися
допустимий
державний службовець
хабар
TYPES OF MARKET. PERFECT COMPETITION
The economists’ model of perfect competition is highly theoretical, but it
does provide a useful tool for economic analysis. Economists are able to use their
model of perfect market as a means of assessing the degree of competition in real
world markets. They set out the conditions necessary for a perfect market and then
contrast these with the situations found in the existing markets for goods and
services. The theory of perfect competition is built on two assumptions, one about
the behavior of the individual firm and one about the nature of the industry in
which it operates.
The industry is characterized by freedom of entry and exit; that is, any new
firm is free to set up production if it so wishes, and any existing firm is free to
leave the industry. Existing firms cannot bar the entry of new firms, and there are
no legal prohibitions on entry or exit.
In a market operation under the conditions of perfect competition, there will
be one, and only one, market price, and this price will be beyond the influence of
any one buyer or any one seller. These conditions can only be satisfied in a market,
which contains certain characteristics. They are as follows:
1. All units of the commodity are homogeneous (i.e. one unit is exactly like
another). If this condition exists, buyers will have no preference for the goods of
any particular seller.
2. There must be many buyers and many sellers so that the behavior of any
one buyer, or any one seller, has no influence on the market price. Each individual
buyer comprises such a small part of total demand and each seller is responsible
for such a small part of total supply that any change in his plans will have no
influence on the market price.
3. Buyers are assumed to have perfect knowledge of market conditions; they
know what prices are being asked for the commodity in every part of the market.
Equally sellers are fully aware of the activities of buyers and other sellers.
4. There must be no barriers to the movement of buyers from one seller to
another. Since all units of the commodity are identical, buyers will always
approach the seller quoting the lowest price.
5. Finally, it is assumed that there are no restrictions on the entry of firms
into the market or on their exit from it.
That is why, in a perfect market, there will be one market price. Firms cannot
charge different prices because they are selling identical products, each of them is
responsible for a tiny part of the total supply, and buyers are fully aware of what is
happening in the market.
Because the market mechanism works, it is not necessary for the government
to intervene. Market reactions, not public policies, will eliminate shortages or
surpluses. There is no need for government regulatory agencies or bureaucrats to
make decisions about who may produce what, or how to produce it, or how much it is
permissible to charge for the product. If there are no government officials to make
such decisions, there will be no one to bribe to make one decision rather than another.
Answer the following questions.
1. Does perfect competition exist in real economic life?
2. What is meant by homogeneous products? Give the examples.
3. How does the existence of homogeneous products influence consumers’ choices?
4. How is price determined in the perfect competition market?
5. What is the level of government interference into the perfect market mechanism?
TASK 3.80. Decide whether the following statements are true or false.
Correct the wrong ones.
Statement
1. The theory of perfect competition is grounded on the assumption that
there is only one supplier of commodities
2. In perfect competition government imposes certain barriers on entry of
firms into the market or exist from it
3. Products of different quality and nature are characterized as homogeneous
True
False
4. In perfect market shortages as well as surpluses are regulated
by government
TASK 3.81. The following words will help you in the situation when you
are to describe the toughness of rivalry.
Match the following list of words with their Ukrainian equivalents.
__1. to vie
__2. competitor
__3. rival
__4. rivalry
__5. competition
__6. competitive
__7. dog-eat-dog
__8. rat race
a)
b)
c)
d)
e)
f)
g)
h)
суперник;
конкуренція, змагання, конкурс;
конкурентоспроможний;
суперництво;
травити, натравлю вати;
конкурент;
конкурувати;
жорстока конкуренція; божевільна гонка за багатством.
TASK 3.82. Insert the missing letters.
p_oh_bit_ _n
be_ _nd
a_ _es_ment
ho_og_n_ _ _s
co_rp_s_
заборона
за межами
оцінювання
однорідний
містити
to a_pro_ _h
to q_ot_
t_ny
in_er_ _n_
b_r_ _ _cr_ _s
наближатися до
призначати
крихітний
втручатися
бюрократи
TASK 3.83. Translate into English.
1. На ринку вільної конкуренції кожен продавець не має перешкод для
продажу своїх товарів покупцю. 2. На ринку вільної конкуренції фірма не
встановлює, а приймає ціну, і це означає, що підприємство повинно
змиритися із ціною, що встановлюється. 3. За умов ринку вільної конкуренції
для фірм, що входять у галузь і виходять з неї, немає жодних обмежень
входу і виходу. 4. Однією з умов ринку вільної конкуренції є те, що уряд не
повинен втручатися у діяльність суб’єктів господарювання. 5. Конкретний
продавець або покупець не має великого впливу на попит або пропозицію на
ринку вільної конкуренції. 6. Покупці і продавці не можуть встановлювати
ціну, відмінну від ринкової. 7. На ринку вільної конкуренції можна уникнути
корупції і хабарництва, оскільки влада не зможе впливати на випуск і продаж
продукції. 8. Конкуренція як на світовому ринку, так і всередині країни
змушує виробників покращувати якість товарів, модернізувати обладнання
та використовувати нововведення, щоб привабити більше споживачів.
TASK 3.84. Read the text and complete the exercises that follow.
numerous
to arise
to be concerned with
to administer
a substitute
a rival
to respond
численний
виникати
бути пов’язаним з
управляти
замінник
конкурент
(тут) реагувати
expected
to revise
aggregate
excessive
a sharp fall
extent
accurately
очікуваний
переглядати
сукупний
надмірний
різке падіння
розмір, величина
точно
MONOPOLY
Although in a perfect market competition is unrestricted and sellers are
numerous, free competition and large numbers of sellers are not always available
in the real world. In some markets there may only be one seller or a very limited
number of sellers. Such situation is called “monopoly”, and may arise from a
variety of different reasons.
The word “monopoly” comes from Greek words monos polein, which
means “alone to sell”. Monopoly in the market indicates the existence of a sole
supplier. It may take the form of a unified business organization, or it may be an
association of separately controlled firms, which act together and charge
common prices. This example indicates that monopolistic power is concerned
with supply – it does not necessarily mean that there is one producer. The main
point is that buyers face a single seller.
In contrast to the competitive firm, monopolist is a price setter, not a price taker.
The monopolist is sometimes said to be able to administer its prices, which means that
it, unlike the perfect competitor, can and usually does select its own prices.
It is difficult to imagine a firm without any competition. A firm may have a
complete monopoly on a particular product at a given moment, but every product
has some present or potential substitute. Some products have fairly close
substitutes, and even a single seller producing such a product will have close
rivals. Other products may have no existing close substitutes, but new products
may be developed that will compete with them.
One argument in favor of monopoly is that it provides greater stability of
output and prices. In a competitive market producers respond to market signals
(i.e. price changes) in the expected manner. If an increase in demand leads to
higher prices, producers will react by revising their production plans upwards. But
the aggregate effect of a very large number of individual decisions to raise output
is likely to result in excessive supply in the next marketing period. This will lead
to a sharp fall in prices and producers will revise their output plans downwards.
A monopolist, on the other hand, is likely to react to demand changes in a
more effective manner. He supplies the total market and should be capable of
estimating the true extent of market trends much more accurately than a small firm
supplying a tiny part of the market.
Answer the following questions.
1. What market is referred to as “monopolistic”?
2. Is the existence of an ideal monopoly possible under present day conditions?
3. Why is a monopolist considered to be a price-setter? What does it mean?
4. Explain what is meant by a “close substitute”. Give examples of such products.
5. What are the positive and negative sides of monopoly?
TASK 3.85. Fill in each blank space with the appropriate variant.
close substitutes
competitors
economic competition
single seller
raise prices
supplier
1. Monopolies are characterized by the lack of _________. 2. Trying to
monopolize the market a company gains the ability to _________ or exclude
_________. 3. A monopoly exists when a specific company is the only
_________ of a particular commodity. 4. If there is a _________ in a certain
industry and there aren’t any _________ for the product, then the market
structure is that of a ‘pure monopoly’.
TASK 3.86. Paraphrase the following word combinations with the phrases
from the text.
To set similar prices, to regulate prices, an ideal competitor, to react to market
signals, to lead to exorbitant supply, market tendencies, a small part, efficient way.
TASK 3.87. Read the text and answer the questions that follow.
garbage disposal вивезення сміття
sewage removal відведення стічних вод
matches сірники
circumstances обставини
to cure brain cancer лікувати рак мозку
invention винахід
KINDS OF MONOPOLY
A monopoly occurs when only one company sells a particular product on the
market. A product can be a good, such as jewelry, computers or energy, or it can
be a service, such as garbage disposal or sewage removal. Economists differentiate
between different types of monopolies based on why the monopoly exists, such as
where the barrier to entry for new companies comes from, which could be high
entry costs or legal restrictions.
Economists determine such kinds of monopoly:
Government Monopolies
In economics, a government monopoly (or public monopoly) is a form of
monopoly in which government or government corporation is the sole provider of
a particular good or service (usually of primary importance) and competition is
prohibited by law. Some countries have state monopolies in production and selling
of such basic commodities like steel and transport, while other countries have
monopolies in such comparatively unimportant commodities as matches. Most
national authorities monopolize the postal services within their borders as well as
the railroads, public utilities and health care systems.
Natural Monopoly
A natural monopoly occurs when the type of industry makes it financially
impractical, if not impossible, for several companies to enter the industry. For
example, if you had numerous companies attempting to offer sewage services
(railways or water supply etc.), that would require to multiply sewer lines running
to homes (or multiplication of cables, transformers, pipelines etc.) which is financially
inefficient or even impossible. This makes the sewage industry a natural monopoly.
A different kind of natural monopoly arises when a country, under
geographical and geological circumstances, has control over major natural resources
or important services, as for example the Egyptian ownership of the Sues Canal.
Geographic Monopolies
Geographic monopolies occur when a market’s potential profit is so limited
by its geographic location that only a single seller decides to enter the market. An
example would be only one general store in a small village, which has a monopoly
on the goods it sells. Because of the small size of the village, it may NOT be
financially beneficial for another company to come in.
Technological Monopolies
Another kind of monopoly arises when the law of a country grants certain
producers, authors and inventors a full monopoly over the sale of their own
products. Technological monopolies occur when the good or service the company
provides has legal protection in the form of a patent or copyright. For example, if a
company develops and patents a drug to cure brain cancer, that company has a
legal monopoly over that drug. Bill Gates with his invention of Microsoft can
serve a vivid example of such kind of monopoly.
Answer the following questions.
1. What basic commodities do governments try to monopolize?
2. What does a “natural monopoly” mean?
3. Is your local electric company considered a natural monopoly? Why?
DID YOU KNOW THAT?
In Scandinavian countries some goods that are considered to be harmful are
distributed through a government monopoly. For example, in Finland, Iceland,
Norway and Sweden, government-owned companies have monopolies for selling
alcoholic drinks. Casinos and other institutions for gambling (азартні ігри) might
also be monopolized. In Finland, the government has also a monopoly to operate slot
machines (ігрові автомати).
___________________________TALKING POINT
TASK 3.88. Discuss the following questions with your groupmates.
Why do illegal monopolies appear? Should they be removed? How can they be
restricted? What do you know about antimonopoly law in Ukraine and other countries?
TASK 3.89. Read the text carefully and complete the exercises that follow.
price discrimination цінова дискримінація
pricing policy цінова політика
to undersell продавати дешевше
to resell перепродавати
PRICE DISCRIMINATION
Most businesses charge different prices to different groups of consumers for
what is more or less the same good or service! This is price discrimination and it
has become widespread in nearly every market.
As monopolists always tend to maximize profits, they are often being
criticized for discriminating in their pricing policy, which means that they can
charge different prices in different markets for the same commodity.
We have plenty of facts from our everyday life showing price discrimination.
Electricity and telephone charges may vary according to the time at which they are
consumed as well as according to the type of consumer (living in a city and in the
countryside). When going to the theatre you may pay a different price for the ticket
depending on the seat in the hall, while the performance is the same for everyone.
The market is usually separated in two ways: by time or by geography.
Telephone and electricity companies usually separate markets by time: there
might be three rates for telephone calls: a daytime peak rate, an off-peak evening
rate and a cheaper weekend rate. In western countries electricity suppliers also
offer cheaper off-peak electricity during the night. Markets can also be separated
by geography. For example, exporters may charge a higher price in overseas
markets if demand is more inelastic than it is in home markets.
There are plenty of other examples of price discrimination: discounts for
students to enter movie theatres and travel on buses and railway; business meals in
restaurants (during lunch-time); different prices for kids and adults for sporting
and attractions in amusement parks; lower prices for females entering some night
clubs/bars; hotels offering off-season discounts.
The following conditions are necessary in order price discrimination policy
to be effective and profitable for a firm-monopolist.
1. In order to charge different prices the seller must be able to control the
supply otherwise competitors would undersell him in the market. Only a
monopolist has the power to determine the price (or prices) at which they
sell their commodity.
2. Markets must be clearly separated so that people buying goods at lower
prices couldn’t resell them to those ready to pay a higher price.
Answer the following questions.
1. What does the term price discrimination mean?
2. What types of price discrimination can you name?
3. What examples of price discrimination of your own can you give?
4. What is your personal attitude to price discrimination? Do you think it’s
fair to charge different prices to different people for one and the same commodity?
5. What are the necessary conditions for the price discrimination to exist?
TASK 3.90. Decide whether the following statements are true or false.
Correct the wrong ones.
Statement
1. Monopolist is often able to set a “fair” price in his pricing policy
2. Price discrimination is charging different prices to different layers
of society
3. Most passenger transport providers charge more expensive rates for offpeak journeys
4. Firms-monopolists will suffer if price discrimination is limited
True
False
5. Price discrimination can be observed in perfectly competitive markets
TASK 3.91. Translate the parts of sentences in brackets into English.
1. _____________ (цінова дискримінація) occurs when a firm charges a
different price to different groups of consumers for _____________ (ідентичний
товар або послуга). 2. The key to price discrimination is to exploit the fact that
different _____________ (споживачі) have different willingness and
_____________ (спроможність платити за товари та послуги). 3. The firm
must be able to split the market into different groups of consumers; this is
normally done by _____________ (розмежування ринків) by geography, time or
_____________ (дохід). 4. The main _____________ (мета) of price
discrimination is to _____________ (підвищувати) the total revenue and
hopefully _____________ (прибуток постачальника).
TASK 3.92. Find an appropriate word for each blank space. In all
sentences the initial letter is provided.
1. A monopolist s______ the quantity of products that buyers are willing to
p______ at a certain price. 2. This product doesn’t have very close s______.
3. Monopoly that arises from the geographical circumstances is a n______
monopoly. 4. Legal monopolies appear whenever the state p______ producers
with a full m______ over the sale of their own product.
TASK 3.93. Insert the missing letters
_ub_t_tu_e
_ir__mst_n_es
dis_rim_nat__n
b_n_fi_ial
o_t_in
замінник
обставини
дискримінація
вигідний
отримати
e__il_bri_m
com_eti__on
se_er_
a__us_ment
ex_es_
рівновага
конкуренція
жорсткий
врегулювання
надмірний
__________________________TALKING POINT
_
TASK 3.94. Discuss the following situations with your groupmates.
1. Suppose that only one professor teaches economics at your university.
Would you say this professor is a monopolist who can charge students any “price”
in the form of readings assigned, tests given, and material covered?
Suppose that two additional professors are hired; has whatever monopoly
power existed been decreased?
2. Which of the industries – chocolate sweets, local newspapers, gas, car,
coal – would you most like to monopolize? Why?
3. Which industry would you, as a consumer, like to be least monopolized?
TASK 3.95. Translate into English
1. Монополія – це тип ринкової структури, коли лише одна фірма
пропонує весь ринковий обсяг блага, що не має близьких замінників.
2. Монополія не сприяє розвитку і вдосконаленню товарів, оскільки
монополісту вигідно продавати свій товар за високими цінами, не думаючи
про розвиток галузі в цілому. 3. Фірма-монополіст є ціноутворювачем –
тобто встановлює ціну на ринку. 4. Цінова дискримінація – це зменшення
ціни на монополізований продукт для одних верств населення, і збільшення
цін для інших таким чином, щоб монополіст зміг отримати максимальні
прибутки. 5. Монополісти часто встановлюють ціни не беручи до уваги
можливості покупців придбати їх продукцію. 6. З метою збільшення свого
прибутку монополісти досить широко використовують цінову дискримінацію,
тобто один і той самий товар або послуга продається різним категоріям
покупців за різними цінами. 7. Ціни на квиток у театр, які встановлюються
залежно від місця у залі, в той час як вистава одна для всіх, приклад цінової
дискримінації. 8. Реклама, яку провадять монополісти, зазвичай містить лише
інформацію про їх продукцію, а не про ціну, за якою її продають.
9.Виробництво медичних препаратів вимагає спеціальної ліцензії.
TASK 3.96. Read the text and complete the exercises that follow.
to imply означати
absence відсутність
keen competition жорстка конкуренція
extent міра, ступінь
striking feature вражаюча риса
to heighten посилювати
MONOPOLISTIC COMPETITION
Perfect competition is not to be found in real world and absolute or pure
monopoly is also impossible to achieve since it implies operating in the absence of
competition. While it is not difficult for a firm to become a sole supplier (by the
use of brand names and trade marks) it is extremely difficult to achieve a situation
where there are no substitutes for the product.
Modern capitalism is characterized by a large number of “limited” monopolies.
They are sole suppliers of branded goods, but other firms compete with them by
selling similar goods under different brand names. This market situation is described
as monopolistic (imperfect) competition. Thus branding and the use of trademarks
differentiate the goods. The individual firm has a monopoly position, but it faces keen
competition from firms supplying very similar goods. It has, therefore, only a limited
degree of monopoly power. Its extent depends upon the freedom of other firms to
enter the industry. Product differentiation is created by advertising, which is, perhaps,
the most striking feature of monopolistic competition.
Advertising is used to heighten in the consumer’s mind the differences between
Brand X and Brand Y. Two branded products may be almost identical in their
technical features or chemical composition, but if advertising has created different
images in the consumer’s mind, then these products are different from our point of
view because the consumer will be prepared to pay different prices for them.
Answer the following questions.,
1. Why is it difficult to achieve perfect competition in monopolistic markets?
2. What is referred to as “limited monopoly”?
3. How can monopolistic competition be defined?
4. How can product differentiation be created?
5. How can buyers use advertising in their market race?
TASK 3.97. Insert the missing letters
tr_d_m__k
com_os_t__n
hom__ene__s
_bs_n_e
i_pl_
торгова марка
структура
однорідний
відсутність
означати
_im_t_d
hei__ten
_m_g_
s_p_li_r
con_um__
обмежений
посилювати
образ
постачальник
споживач
TASK 3.98. Translate into English.
1. Дуже часто ми купуємо майже однакові товари, які відрізняються
лише назвою або упаковкою. 2. Ситуація на ринку, коли фірми конкурують
за продаж однакового товару під різними брендами, називається
монополістичною конкуренцією. 3. Реклама є одним з найважливіших
факторів, які впливають на продаж товару. 4. Обсяги реалізації (the sales) на
ринку монополістичної конкуренції залежать від правильного вибору
упаковки. Якщо упаковка приваблива, ймовірність придбання товару
покупцем значно зростає.
TASK 3.99. Decide whether the following statements are true or false.
Correct the wrong ones.
Statement
1. In the monopolistic competition there are many firms with freedom of entry
and exit
2. Modern capitalism is characterized by a large number of “limited” monopolies
3. An individual firm has a monopoly position, but it faces keen competition from
firms supplying very homogeneous goods
4. A monopolistic competitor is a price setter, not a price taker
5. Two branded products always have differences between each other in their
technical features or chemical composition
True
False
TASK 3.100. Compare perfect competition with monopolistic competition.
Perfect competition
1. All firms sell _____ (ідентичні товари).
2. All firms _____ (приймати ціну).
3. All firms have relatively small _____
(частка ринку).
4. (Покупці знають природу) ______ of the
product being sold and the prices charged by
each firm.
5. The industry is characterized by _____
(свобода входу і виходу).
Monopolistic competition
1. All firms produce similar yet not perfectly
_____ (замінні товари).
2. All firms are able _____ (увійти в галузь)
if the profits are attractive.
3. All firms are _____ (максимізатори
прибутку).
4. All firms have some market power, which
means none are _____ (приймач ціни).
TASK 3.101. Translate into English.
1. У кожного виробника на ринку монополістичної конкуренції є свої
специфічні методи обробки однієї і тієї ж сировини. 2. Завдяки рекламі
продавці подібних між собою товарів всього світу змогли переконати
покупців у тому, що кожен товар є унікальним і відрізняється від товару
конкурента. 3. Відмінною рисою ринку монополістичної конкуренції є
диференціація товарів. 4. Конкуруючі фірми виготовляють продукцію, яка
фактично задовольняє одну і ту саму потребу покупця, однак,
диференціюється за видами, якістю, класом.
TASK 3.102. Read the text and complete the exercises that follow.
an oligopoly олігополія
to account for відповідати за
to tend to dominate прагнути заволодіти
a vivid example яскравий приклад
to conclude tacit
agreements
restrictive
striking contrasts
in response to
укладати таємні
угоди
обмежуючий
великі відмінності
відповідно до
OLIGOPOLY
In many modern technologically advanced industries we find a market
situation known as oligopoly; this is where the market is dominated “by the few”.
In other words, a small number of very large firms account for practically the
whole output of the industry.
In most of these cases entry is neither perfectly easy nor wholly
blockaded. In many industries, a small number of firms – between three and a
dozen – tend to dominate the industry, and newcomers find it practically
impossible to establish themselves.
Oligopolies tend to develop in industries that require large capital
investments. It’s the market of big business. Automobile industry serves a vivid
example of oligopoly. That is, 3 giant corporations General Motors, Ford and
Crysler, which control 90% of total automobile output, control car market in the
USA. Similar situation can be observed on the steel, computer, cigarette and
weapon markets.
Another important characteristic of an oligopoly is interdependence of the
firms. This means that each firm must take into account the likely reactions of
other firms in the market when making pricing and investment decisions.
Sometimes oligopolists conclude some sort of tacit agreements on prices.
They may decide upon common prices as well as to agree upon the sharing of
sales markets for getting guaranteed high profits. Such kind of agreements
allow monopolizing sales markets and draw some similarities between
oligopoly and monopoly.
One of the most striking contrasts between perfectly competitive and
oligopolistic markets concerns the behavior of prices. In perfect competition
prices change daily, even hourly, in response to changes in demand and supply.
Oligopolistic prices change less frequently. Manufacturers of radios,
automobiles, television sets, and computers do not change their prices that
frequently as those for basic materials.
In order to fully understand oligopoly, it will be sensible to consider the
advantages and disadvantages of this market structure. In an oligopoly there are
only a few sellers of a specific product or service which usually has a big effect on
the competition for that product or service.
Advantages of Oligopoly
– Big businesses gain massive long term profits.
– Firms are able to determine prices.
Disadvantages of Oligopoly
– Power is in the hands of a wealthy few.
– It is difficult for new ideas to come into play.
– Setting prices (These big businesses have the power to set prices which is
negative for the society and for other types of businesses, in addition to being illegal).
As you can probably see, oligopolies appear to be beneficial for the
successful businesses, but not so good for the other people in a society.
Answer the following questions.
1. In what industries can we find an oligopolistic market?
2. How do oligopolists behave in the market?
3. Are there any barriers to enter an oligopolistic market?
4. How does oligopoly differ from perfect competition and monopoly?
5. What are the shortcomings and benefits of oligopoly?
6. Can you give any examples of Ukrainian oligopolists?
DID YOU KNOW THAT?
United Kingdom
– Five banks dominate the UK banking sector, they were accused of being an
oligopoly by the relative newcomer Virgin bank.
– Four companies (Tesco, Sainsbury’s, Asda and Morrisons) share 74.4% of the
grocery market.
– The detergent market is dominated by two players, Unilever and Procter & Gamble.
United States
– Six movie studios receive 90% of American film revenues.
– The television industry is mostly an oligopoly of seven companies: The Walt
Disney Company, CBS Corporation, Viacom, Comcast, Hearst Corporation, Time
Warner, and News Corporation.
– Four wireless providers (AT&T, Verizon Wireless, T-Mobile, Sprint Nextel)
control 89% of the cellular telephone market.
– Anheuser-Busch and Miller Coors control about 80% of the beer industry.
Worldwide
– The accountancy market is controlled by Price Water house Coopers, KPMG,
Deloitte Touche Tohmatsu, and Ernst & Young (commonly known as the Big Four)
– Three leading food processing companies, Kraft Foods, PepsiCo and Nestle,
together achieve a large proportion of global processed food sales.
– Boeing and Airbus have a duopoly over the airliner market.
TASK 103. Insert the missing letters
ta_i_
fo_mi_a_le
s_ _cs
b_n_s
re_tri_t_v_
мовчазний
непереборний
акції
облігації
обмежуючий
ar_a_g_
a_re_ _ent
f_e_ue_tl_
ma_uf_ct_ _er
b_r
Домовлятися
Угода
часто
виробник
обмеження
_________________________TERMS REVISION
TASK 3.104. Complete the sentences.
1. Monopoly is a type of market where …
2. In practice the kinds of monopoly are as follows: …
3. It is almost impossible to imagine a firm without competition because …
4. Price discrimination is characterized by …
5. The goods can be differentiated by …
6. Advertising is used to …
7. It is possible to separate markets by …
TASK 3.105. Define the type of market structure for each situation.
1. There is a large number of suppliers on the market offering
brand shoes at relatively similar prices
2. There is only one hair-dressing saloon in the town buying up
hair
a) monopoly
b) monopsony
3. A few large scale firms are functioning at the market of
automobile tires
c) monopolistic
competition
4. There are three companies in the city buying up fish
d) oligopoly
5. There is a single provider of telecommunication services
e) perfect competition
6. There is a large number of farmers supplying potatoes
f) oligopsony
TASK 3.106. Translate into English
1. Ситуація на ринку, коли в одній галузі домінують декілька продавців,
називається олігополією. 2. В умовах ринку олігополії бар’єри входу на
ринок є надто високими для малого бізнесу. 3. Інколи олігополісти
укладають таємні угоди про встановлення ціни на продукт даної галузі.
4. Для контролю над ринком олігополісти проводять єдину узгоджену цінову
політику
з
метою
отримання
гарантованих
високих
прибутків
та
недопущення на ринок нових конкурентів. 5. Якщо маленька фірма захоче
увійти на ринок, то більші фірми встановлять такий рівень цін, за якого
маленька фірма збанкрутує.
TASK 3.107. Fill in the gaps in the table with a suitable type of market.
REVIEW OF MARKET CLASSIFICATIONS
Strategies
available
Price
competition
Product
differentiation
Extent of
advertising
Number of
firms
Barriers to
entry
(1)______
many sellers who
follow the market
price for identical
products
almost none:
market sets prices
TYPES OF MARKET
(2)______
(3)______
one seller who
few sellers who
sets the price for
are sensitive to
a unique product
each other’s
prices
none: sole seller
some: mostly
sets a price
agreed pricing
policies
none: no other
various:
producers
depending on
industry
(4)______
many sellers who
compete on
nonprice factors
little: purpose is to
inform what
products are
available
little: purpose is
to increase
demand for
product class
some: purpose is
to inform about
the product but
avoid price
competition
some: compete
over a range of
prices
some:
differentiate
products from
competitors’
much: purpose is
to differentiate
firm’s products
from
competitors’
many
one
few
many
ownership of
scarce resources;
patents and
copyrights
usually the
barriers are
capital or
technological
requirements
none
none: products are
identical
none
___________________________TALKING POINT
TASK 3.108. Form groups of four-five students and discuss the issue. Then
share your thoughts with the entire class.
The city A has three taxi companies. Orange Cab, the largest one, seems to
change prices one day and the other two, Green Cab and White Cab, make the
same changes the next day. What type of market do we observe here?
_____________________________CROSS WORD
TASK 3.109. Solve the crossword.
Cross
1. Science of the production, distribution and consumption of goods and services.
3. Willingness to buy some good or service.
4. Something made for selling.
7. Quantity of produced goods.
10. The amount of money one owes to someone else.
Down
2. The result of inability to satisfy all of everyone’s wants.
5. Place where buyers and sellers meet.
6. Using up, consuming.
8. Money received during a given period as salary, receipts from trade, interest etc.
9. Price at which producers want to sell and consumers want to buy.
11. Anything owned by a person, company etc. that has money value and that
might be sold to pay debts.
6
5
3
4
9
11
2
8
1
7
10