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 Competition 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.

Always Sunny: One Rock

Dennis and Dee are trying to buy a crack rock in order to manipulate the welfare system, but they aren’t really sure of the cost of a crack rock. When they approach a street dealer, he quickly realizes that the two clients aren’t well informed and he can earn a bit of extra profit by charging them a higher price. Luckily for him, they agree.

Magi – The Adventures of Sinbad — The Trader from Balbadd

Sinbad travels to a popular city with goods from a country which is not only highly secluded, but up until this point has refused to trade with other nations. Sinbad, being the only one able to establish trade with them, sets up a shop in this popular city, knowing that his goods will sell quickly. Within the hour of setting up shop, a merchant comes by and buys out his entire stock and sells them for a higher price. Realizing his mistake of setting a low early price, and eager to try to learn more about the economy, Sinbad finds the merchant again in a bar and asks for his help. This clip shows the interaction between the two, as the merchant teaches Sinbad about how his mistake heavily put him behind, and how to avoid such a mistake in the future.

Since Sinbad was the only one who is able to get sell these products from the highly secluded country, he was a monopoly firm in the area. He was bested when the other firm arbitraged his product.

Clip and summary provided by Michele Killoran.

Moscow on the Hudson — Coffee Aisle

Robin Williams stars as a defected Soviet living in the United States in Moscow on the Hudson. His shift from communist markets to American-style markets is a bit overwhelming as he visits a grocery store to find the coffee aisle. After realizing that there’s no line to buy coffee and that there are a dozen varieties of coffee, he passes out in the middle of the store.

Extremely Decent — First Honest Cable Company

When a firm has monopoly power, they have the ability to charge higher prices for a reduce quantity (and sometimes quality) service. If consumers don’t have alternatives then they are forced to deal with poor customer service and unreliability. This comedy piece highlights a fictions cable company that actually admits they aren’t very good.

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