Date:April 22, 2013

Competition: When businesses compete, consumers win!

A monopoly is a single seller of a good or service. A monopoly describes a situation in which this single seller owns all or nearly all of the market for a given type of good or service. We can say a company is a monopoly or there is a monopoly for a certain type of good or service. When there is more than one seller of a good or service, we have competition.

Remember, competition among sellers lowers costs and prices. Competition encourages producers to produce more of what consumers are willing to buy.

THINK…

Can you imagine what our country would be like if monopolies ruled the business world?

Under monopolies, there would be no competition. What difference would that make?

Did you know that the government has a special organization called the Bureu of Competition? It is called the Bureau of Competition and it is part of the Federal Trade Commission.

The Federal Trade Commission’s Bureau of Competition enforces the nation’s antitrust laws, which form the foundation of our free market economy. The antitrust laws promote the interests of consumers; they support unfettered markets and result in lower prices and more choices.

What do you think the US would be like if we did not monitor monopolies?

OBJECTIVES

At the end of the lesson you will be able to…

  • Identify at least one important benefit of competition.
  • Identify the role the Federal Trade Commission plays in regulating competition.
  • Describe how competition encourages innovation.
  • Give at least one reason why anti-trust laws encourage competition.
  • Explain how competition encourages producers to produce more of what consumers are willing and able to buy.
  • Describe events that led to the creation of the FTC.
  • Identify the opportunity cost.
  • Write a paragraph which clearly articulates your choice with 3 supporting ideas.