Saturday Night Life — Toys ‘R Us

When teaching students about the different types of firm structures, we always discuss monopolistic competition and how firms try to differentiate their products to get positive economic profits. This short clip shows how Toys R Us is staying open for 87 hours straight to differentiate itself from other toy stores around the holiday season.

Thanks to James Tierney for the clip and description.

Jurassic Park — Coupon Day at the Park

This clip has both the idea of an inelastic good and the idea of price discrimination. I suggest using it when teaching elasticity and then also using it when you teach price discrimination and talk about how they connect!

Here’s the page from the book.

Thanks to James Tierney for the clip and description!

Superior Donuts — Food Truck Competition

A new food truck sets up shop outside the donut store. The clip starts with the new owner coming by and asking how long the shop has been in business and what kind of customers stop by. She quickly realizes that she can setup shop and steal some of the existing customers. This clip does a really good job showing how monopolistically competitive markets function and that even though an imperfect substitute enters the market, the demand for one business decreases.

 

NPR Planet Money — The Price Tag Hasn’t Always Existed

Really neat summary of the history of the price tag. This could make a great opening for a principles course or a good example of price discrimination before the price tag was invented. The price tag can be used as an example of the Quaker’s insistence on the law of one price or the idea of efficiency/equity tradeoffs. I like to use this video in the beginning of my course to introduce the idea of prices, values, and costs.

MedicoreFilms — Free Hugs

My students favorite clip when discussing product differentiation is this clip from MedicoreFilms where a guy offers Deluxe Hugs for $2 more. One of his opening lines best illustrates the concept of monopolistic competition:

Deluxe guy: How’s businesses?

Free guy: Mine are free, this isn’t a business.

Deluxe guy: Different people want different stuff, so it’s cool.

Businesses can differentiate their products by quality, style, location, etc. The guy offering deluxe hugs is trying to fill a portion of the market from people willing to pay more for “better” hugs.

The National — Bread Collusion in Canada

Over the past 15 years bakers in Canada have been colluding to raise the price of bread across many of Canada’s major retailers. The retailers (allegedly) agreed to the price increase so long as the others in the group also maintained the high prices. While some of the retailers are denying the claim, Canada’s┬áCompetition Bureau is developing a case to expose the participants.

Los Angeles Clippers — Dynamic & Variable Pricing

The LA Clippers explain the difference between variable and dynamic ticket pricing, which are often confused by fans. Variable pricing refers to changes in ticket prices based on factors like opponent, day of the week, or time of the game. Dynamic ticket pricing takes things a step further and actually bases the ticket price off demand and supply for a particular game.

Always Sunny — Monopolizing the Trash Industry

When the local garbage companies go on strike, Frank comes up with a plan to have Charlie, Mac, and Dennis go around and pick up trash. Initially they are slated to get a van and go door-to-door, but they realize it may look better if they drive around in a limo to pick up the trash. What they don’t realize is that customers don’t really care because they just want the trash gone and are willing to pay high prices for it to be removed.

Always Sunny — Where it Hurts (NSFC)

The gang decides to try and start selling their own gasoline because they are tired of the high prices the local gas station is charging. The three come into the gas station to let the owner know that he’s about to see the pain of a free market because they intend to take customers away from him. Free markets allow for easy entry and exit of competitors, which should drive down prices and profits.

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