Category: Market Structures

Going Places (1948)

 

From YouTube:

Cold War cartoon defending the profit motive against anti-capitalist critics. The second of seven smart-looking animated shorts in the “fun and facts about American business” series. Its subject is “the profit motive,” and it stars “Freddie Fudsie,” a lazy soap maker who just wants to go fishing. He invents bar soap, makes some money, and is about to retire in peace and quiet when a sexy lady (the Profit Motive) walks by and Freddie — who suddenly needs more money to win her affection — never sees a fishing hole again. But that’s okay, because “the profit motive has been the driving force behind the growth of American industry” and “will make a better life for the children of tomorrow.”

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The Simpsons — Profit Motives of Publishers

What if it does so, in order to make a profit, by producing things you think are of poor quality. When is profit seeking good? Does Apple prey on us by creating the iPads we love? Or is Lisa on to something here, suggesting that we should not buy things from publishers that don’t contribute to “culture”? This clip should provoke some good discussion, and is ideal for an economics class.

Thanks to F. Bailey Norwood.

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Mad Men — Lucky Strike Pitch

The team at Sterling Cooper Advertising Agency has to come up with a new way to sell cigarettes because the government has limited what companies can say about their products. The government has put a ban on advertising such that firms can’t say that their product is healthy. Instead, the men of Sterling Cooper talk about product differentiation and how to make Lucky Strike look special even though it’s the same product.

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South Park — Uber and Handicar

The characters are complaining about Handicar, a service provided by Timmy and how it is stealing all of the transportation business. Mimsy, another driver, adds his two sense by talking about competition. He includes an economist’s take on incentives and how a certain producer can gain economic advantages in a competitive market. This is important to economics because it includes the topics of a competitive marketplace as well as the concepts of advantage in that marketplace.

Thank you for the clip and the summary Taylor Campbell.

 

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Forrest Gump — Only Boat Left

 

Forrest easily enters the shrimp market by buying a boat. There are multiple buyers and sellers, and no one shrimping boat controls the price of shrimp. Therefore the shrimp market is an example of perfect competition. Once the hurricane hits it forces all the other boats to exit the market. Turning the market into a monopoly. Forrest is the sole supplier of the product, controlling the entire market, turning it into a monopoly.

Thanks for the clip and summary Keagan Rallis

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The Founder — Opening Scene

The Founder is based on the rise of Ray Kroc and the McDonald’s brothers. The opening scene of the movie can be used to talk about a variety of topics in producer theory. Michael Keaton plays entrepreneur Ray Kroc and the opening scene starts with Kroc explaining how fast food establishments can upgrade to a 5-spindle milkshake machine and boost the production of milkshakes at the restaurant. Keaton also goes describes themes that are used in monopolistic competition that focus on firms differentiating their products, perhaps by being able to focus on milkshakes.

Thanks for the submission Ryan Herzog!

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I Love Lucy — 5 Cent Hamburgers

 

Price wars aren’t good for business profits, which is why many firms may want to collude. If two goods are close substitutes, prices should be driven down near the marginal cost of production. This is a good introduction to the long run outcome of perfect competition, but can also be used to show the shut down rule. When prices drop too low, it may be worth some firms to stop production.

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Rihanna Tap Water

 

Would you buy tap water if it was marketed by Rihanna? This comedy clip works as a great introduction to the idea of product differentiation and marketing. It can also be used to talk about why a celebrity would endorse a product and the signalling value of hiring those celebrities.

Credit: Michael Coon

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