Category: Market Structures

Parks & Rec — Verexxotle

In this satirical mock advertisement from Parks and Recreation, a local television station promotes a fictional mega-merger between Verizon, Exxon, and Chipotle. We learn that they have formed one of just eight remaining companies in America by the year 2017. The ad cheerfully celebrates the merger while glossing over the disturbing level of market consolidation.

This clip is a clever and funny way to introduce students to oligopoly and market power. It demonstrates how mergers can reduce competition and concentrate economic power in the hands of a few large firms.

0

King of the Hill – Ilegal Propane Cartel

In this clip from King of the Hill, local propane sellers had engaged in a price war that drove prices so low that they were incurring losses. Frustrated by the unsustainable competition, Hank Hill brings the producers together to encourage them to “work together” and charge more reasonable prices. What starts as an attempt to stabilize the market quickly becomes an illegal propane cartel, resulting in higher prices and larger profits for the few remaining sellers.

The scene shows how firms may be tempted to coordinate prices to avoid losses, even though such agreements harm consumers and violate antitrust laws.

Thanks to Brian Lynch for the clip recommendation

0

The Tom Green Show – Undercutters Pizza

In this sketch from the Tom Green Show, the host engages in an unconventional experiment where he shadows a pizza delivery driver. As the driver delivers orders, Green attempts to undercut the original pizza company by offering the customers a cheaper pizza from his makeshift, mobile operation, Undercutters Pizza. Despite the lower prices, customers react negatively, some even threatening violence if he doesn’t leave their property. In real markets, firms often vie for customers by offering lower prices for substitutable products.

Thanks to Kevin Carlson for the clip submission!

0

Hobby Lobby – Christmas Competition

The holiday commercial illustrates key economic concepts through the story of two young entrepreneurs competing to sell hot chocolate. Initially, both firms engage in product differentiation by progressively increasing their decorations to attract customers. This competition raises their average costs above what would be necessary in a more competitive market.

The ending of the commercial takes a surprising turn: instead of continuing the costly competition, one firm pivots to selling a complementary product (marshmallows). This demonstrates the potential power of collusion or cooperation, where firms can align their strategies to raise overall profits, behaving more like a monopolist rather than competing solely on price.

Thanks to Patrick Johnson for the clip submission!

0

Air – Creating the Air Jordan

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this scene, Matt Damon (Sonny Vaccaro) explains the idea of creating a brand around a player to Mather Maher (Nike Shoe designer Peter Moore). This business model was revolutionary and has been imitated by numerous companies.

Thanks to John Kruggel for the clip and summary!

0

Air – The Deal

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this clip, Matt Damon (Sonny Vaccaro) negotiates with Viola Davis (Deloris Jordan) over Michael Jordan’s contract. Vaccaro explains that players don’t get to keep a cut of the sales, but Jordan’s mother emphasizes that the Jordan brand will utilize her son’s name, image, and likeness and he deserves to profit from that use.

Thanks to John Kruggel for the clip and summary!

0

The G Word with Adam Conover – Overwhelmed by Choices

Have you ever stepped foot in a grocery store and been immediately overwhelmed by all the choices you have about everything from chips to sodas? The paradox of choice is that we often believe having multiple options makes it easier to find the product we really want, but it turns out that having a lot of options makes it harder to figure out exactly which one we want and often leaves us unhappy with our choice.

0

Community — Market Price

Troy and Abed are sitting at dinner in a fancy restaurant when the bill arrives at the end. Troy initially offers to pay for dinner because it was Abed’s birthday, but is shocked by the final total since so many things on the menu must have been listed as “market price.”

Restaurants often list menu items as “market price” because they may include item (like lobster or fish) that have a constantly fluctuating price. Instead of printing new menus to account for changing prices, restaurants will just list it at “market price.”

Thanks to Luke Starkey for the clip submission.

0

After Life — Ordering a Kid’s Meal

In this clip, the main character, played by Ricky Garvais, is taking his nephew out to lunch. They decide to both order the fish sticks meal from the kids’ menu. When Ricky attempts to order this meal, the waitress informs him it is only for children. Although the café is practicing a common form of price discrimination, Ricky’s character is confused and argues he should be able to order the meal and pay a smaller price for a smaller portion. The server argues this is not true, and that the meal is made cheaper for children. The character claims his nephew is hungry and wants to eat two meals… much to the waitress’s chagrin.

This clip is an excellent display of price discrimination, the necessary condition of being able to segment the consumer base (by age- with visual confirmation), and a conversation/confusion around if different prices truly reflect different marginal costs of production.

Thanks to Sheena Murray for the clip submission and summary!

0

Schitt’s Creek — Christmas Demand & Price Discrimination

The Roses are trying to buy a last-minute Christmas tree, but they’ve come to realize their options are limited. The shop owner knows demand has recently been higher because there aren’t a lot of trees available in the store. Raymond finds that the prices are higher than he was expecting and decides to leave.

The shop owner takes a few creative approaches to selling trees, including bundling air fresheners with purchase and offering a discount if people buy two trees. Price discrimination is a popular tool to increase output for a firm and sell products to people across the demand curve.

Thanks to James Tierney for the submission:

0

Up ↑