Comparing Market Structures
Context for Use
This exercise should be completed after the students have learned about perfect competition, monopoly, monopolistic competition and oligopoly. Students complete the exercise in teams of 4-5 students. The exercise generally takes 15-20 minutes to complete in teams and 10-15 minutes to review as a whole class exercise.
Working in predetermined teams of 4-5 students, teams will analyze the market structure for cell phone operating systems to identify which of the four market structures is exhibited: perfect competition, monopoly, monopolistic competition, and oligopoly. Then teams will analyze the impact of an entrant into the industry.
Expected Student Learning Outcomes
Students will be able to identify the characteristics of each of the market structures: perfect competition, monopoly, monopolistic competition and oligopoly. Students will be able to compare and contrast the market structures.
Students will be able to analyze the impact of an entrant into an oligopolistic industry.
Information Given to Students
Before Class to Prepare for the AE
Students are asked to complete the Comparing Market Structures at-home assignment. The assignment asks students to read two online articles. The first details the trends in global market share in the smartphone operating systems market since 2009. The second article discusses Microsoft's difficulties in establishing a foothold in the industry since the early 2000s. Both will provide background information for students so that they will have a meaningful in-class discussion.
Comparing Market Structures AE
Consider the market for cell phone operating systems below:
Suppose that you are the President of the Board of Directors for Research in Motion (RIM: the operating system of the former Blackberry cell phone). What would you recommend that Microsoft do?
1. Advertise to increase its market share.
2. Leave the industry.
3. Tie the function of the Microsoft smartphone more closely to the operation of the Windows computer.
4. Conduct R & D to develop new, highly useful features that are unique to Microsoft phones.
Comparing Market Structures at-home Assignment (Microsoft Word 2007 (.docx) 13kB Feb18 18)
Student Handout for Comparing Market Structures (Microsoft Word 2007 (.docx) 118kB Jan24 18)
Teams will report out their answer collectively, on a submission paper or on the board, depending upon how visual you want the answers to be. I also collect the student handout from each student so that I can provide them with "credit" or "half-credit" or "no credit" for their participation in the activity. I explain to students that I expect to "see" their notes and graphs that detail how they reached the answer. I also circulate the room during the entire team activity to redirect student discussions and clarify the activity or the course material. Alternatively, you can collect one sheet per team and provide "credit" or "participation" points for team activity.
Students are placed into teams of 4-5 students (typically at the start of the semester). Before class, to prepare students for the exercise, ask students to complete the Comparing Market Structure at-home assignment and bring it to the next class meeting. At the beginning of the next class meeting, they are provided with the attached handout or the market share data can be projected for the entire class to see. As students enter the classroom, I record the completion of the at-home assignment. This is a credit/no-credit activity and can be used toward homework or participation points.
Students must then choose a recorder (this is done on a rotating basis so that every student in a team will be the reporter several times during a semester) who will report the findings and rationale for their team during the entire class discussion. Give students 15 minutes to discuss the question. They may use the textbook and online sources, if allowed. After the 15 minutes, ask each of the reporters to provide their answer and rationale to the question. Create a class list/tally on the board.
Students complete the Comparing Market Structures exercise in teams during class. I encourage students to use their own personal knowledge of cell phone operating systems since this allows them some expertise and self-efficacy. During the discussion, I circulate the classroom to answer questions and redirect or increase engagement in the discussion. The handout can be collected for participation points or credit at the end of the class session. I find that when the exercise is collected at the end of the class meeting, students generally take more detailed notes and expect a correct answer to record. However, when the exercise is not collected at the end of the class meeting, students take fewer notes but engage in the discussion in class. In this case, I ask students to take 5-minutes at the end and summarize their discussion on the handout for their own records.
Since all of Microsoft's choices above have merit, it is important that you ask students to provide information from their readings, textbook and online sources if allowed to use those during class. If there is a consensus around one of the choices (such as "Leave the industry" because the article claims that is what Microsoft ought to do) then play devil's advocate and ask the teams to rank the choices from best to worst. This will allow you to discuss each of the options and have teams provide their rationale for their rankings.