14-Perfect Competition (IV)

14-Perfect Competition (IV) - 1 Agenda Course Overview...

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Unformatted text preview: 1 Agenda Course Overview Industry Analysis : Dry cleaning What To Take Away Microeconomics The Structure of the Course Consumers and Producers Market Interaction Todays lecture Uncertainty Perfect competition Monopoly and Pricing strategies Competitive Strategy Auctions Information in Markets and Agency Game Theory Introduction to Markets Consumer Theory and Demand Technology and Production 2 Agenda Course Overview Industry Analysis : Dry cleaning What To Take Away Industry Analysis: Non-Coin-Operated Laundromats & Dry Cleaners Consider the Dry cleaning industry. This industry comprises establishments providing dry-cleaning services, laundering services and drop-off an pickup sites for laundries and dry cleaners. 3 Industry Analysis: Non-Coin-Operated Laundromats & Dry Cleaners The industry features a very low concentration level. In particular, the top three firms account for roughly 5% of total revenue. Moreover, establishments tend to be small. Around 58% of establishments' employ less than 5 workers, while 80% have less than 10 workers. There is little differentiation in the services provided by the establishments, while price competition is very intense. Dry Cleaners : Demand Demand for dry cleaning services (measured in millions of units of clothing per year) is given by where price p is given in $. Besides household income, demand is sensitive to both fashion trends and work-life behavioral patterns: The introduction of more resilient fabrics (wrinkle-free etc) has lowered the frequency with which clothes need to be washed/pressed. The move towards more informal work environments, where suits and ties are replaced by polos and chinos, has lowered the frequency with which clothes are dry cleaned. p Q d * 000 , 11 000 , 23 4 Dry Cleaners: Individual Supply The industry involves a high degree of personal service and labor input at every stage in the cleaning process....
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14-Perfect Competition (IV) - 1 Agenda Course Overview...

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