EJC_H2Econs_Topic7

How to use this set of lecture notes? 1) BEFORE LECTURES – UNDERSTANDING CONTENT - Reference your notes against your H2 syllabus. Mark out the key concepts so that you know what you MUST know - Read your notes ahead so that you can focus on listening and capturing additional notes during lectures 2) During lectures – APPLYING CONTENT - Bring your hard copy notes along, and use your PLDs to refer to the lecture slides concurrently - Capture additional notes, especially the real -world examples where you can note down how concepts are applied and how economic analysis are developed in varying contexts - You should make use of a notetaking/consolidation tool to take notes during lessons and to consolidate your learning at timely junctures. Examples are M iro, Notion, Goodnotes, Notability, Microsoft OneNote, KAMI, etc. The choice is yours! 3) After Lectures – TUTORIAL PREPARATION to use content flexibly to show application, analysis and evaluation skills - Revise concepts relevant for the case study and essay questions - Refer to the notes and use it flexibly to prepare your answers to meet question requirements. Pure memorisation will not work as it does not involve deep understanding. - Do share your notes with your friends to multiply learning!

Essential Questions: 1. What decisions do firms make? 2. What factors influence a firm’s decisions? 3. What are the different impacts of a firm’s decisions? Introduction to Firms and Decisions: Characteristics, Strategies & Impacts 1. Characteristics 1.1 Perfect Competition 1.2 1.3 1.4 Monopoly Monopolistic Competition Oligopoly 2. Strategies 2.1 2.2 Pricing Strategies Non-Pricing Strategies 3. 3.1 3.2 3.3 Impacts Impact on Consumers Impact on Firms Impact on Society Summary Table CONTENTS

Introduction to Firms and Decisions: Characteristics, Strategies & Impacts How exciting are these times! We are living in an age with disruptive technologies that have changed the rules of the game for many firms. We have seen emergence of the sharing economy where firms like Grab and Airbnb have provided excellent alternatives to taxis and hotels respectively. The incumbent firms, once basking in their dominant market power, are now faced with competition like never before. What insights could we glean from economic theory? Firms (recall Topic 1 on the Central Economic Problem) aim to maximise profits and must make various decisions —such as pricing of their products and adopting non-price strategies, etc. These decisions differ across firms due to varying levels of competition. Understanding key characteristics and behaviours of different firms will help you better understand and appreciate such decisions. Spectrum of Market Competition Economists generally classify the four market structures (perfect competition, monopolistic competition, oligopoly, and monopoly) based on characteristic