The document discusses a competition experiment involving groups of students. It asks students to volunteer to be part of a group that cannot talk and a group that can talk. It also discusses a widget that students can bid up to $1 on. The document then asks students to consider questions about who benefits from competition using business examples, who suffers from competition using examples, and why pricing power depends on the number of firms in the market.

1. 1. Describe a time you
paid more money for a
good or service you
thought was better
quality.
2. Describe a time when
you bought a good or
service that was cheaper
than other brands.
3. How are variable costs
different than fixed costs?
Bellringer

2. Competition experiment
•
•
•
•
•
4 groups
1 volunteer
Group of 3-4, can’t talk
Group of 3-4, can talk
Everyone else
• Think about price &
quality
I will buy one
for up to $1
Widget:
W
Price: $
Your name:

3. Pricing power
• Some firms can choose their own price
• Price makers
• Some firms must take the prices the market
gives them
• Price takers

4. On your BR
3. Who benefits from competition? Use two
specific business examples in your answer
4. Who suffers from competition? Use two
specific business examples in your answer
5. Why does pricing power depend on the
number of firms in the market?