Market Structure - Lesson Plan: 4 x 1 hour lessons plus recommendations for extension activities

A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with market structure and are relevant to the following specifications:

• AQA: Module 4, Sections 14.1 - 14.3
• Edexcel: Unit 4

Aim:

To provide an overview of the different types of market structure and to introduce the diagrammatic representations used in analysing these market structures. The Activity encourages students to analyse how market structure definitions can vary according to the way in which a firm is classified within its market. Through such analysis, the student is encouraged to appreciate that market power is not only wielded by very large firms but also by small firms in a localised context. This is caused by imperfections in the market, mainly due to a lack of knowledge of prices, availability and so on.

The PowerPoint Presentation associated with this topic is large - an attempt has been made to illustrate the diagrammatic representations of the key market structures. It is advisable therefore to view the Presentation prior to use with the class to make a decision on how best to use it. It is recommended that the Presentation be broken up into its constituent parts.

Learning Objectives:

At the end of the lessons, students should:

• Understand the main characteristics of each market structure
• Be confident in the understanding and use of diagrams to explain the short and long run equilibrium positions of each market structure
• Understand the importance of analysing market structures with a degree of subtlety - to understand the nature and purpose of economic models
• Be able to demonstrate higher order skills of analysis and evaluation in dealing with a series of questions on assessing market structures

Resources:

• PowerPoint Presentation -Market Structure [557 KB] (basic version also available for quicker download [209 KB])
• PowerPoint Presentation -The Relationship between Total and Marginal Values [132 KB]
• Mind Map - Market Structure
• Activity - Market Structure
• Projector/PC
• PCs for student research

Related Resources:

• PowerPoint Presentation -The Theory of the Firm [225 KB]
• PowerPoint Presentation -Market Structures [96 KB]

Lesson Structure:

Lesson 1

1. Work from students' current understanding of costs and revenues and market structure by a short question and answer session, assessing understanding of the relationship between different cost and revenue types. (The AS Economics Presentations in the Related Resources section above may be of help here.) (15 minutes)
2. Explain that at A2, the emphasis is on being able to analyse and evaluate market structures and to demonstrate the ability to use diagrams as tools to support the analysis. Begin the Presentation. Deal with the introduction and the information on perfect competition first. (20 minutes)
3. Divide students into groups of no more than four. Ask them to discuss amongst themselves the following:
   
   • Are there any examples of industries that have characteristics that approximate to those found under perfect competition?
   • How useful is the model of perfect competition?

   (10 minutes)

4. Feedback the results of the discussion to the group and draw up a chart to remind the group of the main points raised. (10 minutes)
5. Review main points raised in the lesson. (5 minutes)

Lesson 2

1. Review the main outcomes of the previous lesson. (5 minutes)
2. Go on to the next stage by using the Presentation to look at monopolistic competition. (10 minutes)
3. Discuss the implications of the points raised in the Presentation and highlight the differences between monopolistic and perfect competition. (10 minutes)
4. Look at the information on oligopoly and duopoly from the Presentation. (15 minutes)
5. Ask students to consider the circumstances under which they could safely assume an oligopolistic market structure could be identified. Focus on the fact that the diversity of oligopolistic market structures makes simple classification difficult - this is designed to instill in students the importance of using judgement to analyse and evaluate market structures in examination questions. (15 minutes)
6. Review the main outcomes of the lesson. (5 minutes)

Lesson 3

1. Re-cap on the main points of the previous two lessons. (5 minutes)
2. Use the Presentation to discuss monopoly market structures. Again, discuss the importance of attaching caveats to the structure, to encourage students to understand the purpose of such models. (20 minutes)
3. Put students into groups of no more than four. Ask them to discuss the question 'When is a monopoly a monopoly?' The aim is to identify real life examples of where students believe monopolies exist and to explore the idea that monopoly can mean different things in different circumstances and contexts. (15 minutes)
4. Feedback the outcomes of the discussion to the rest of the group. Discuss the issues arising from the feedback. (15 minutes)
5. Review the main outcomes of the lesson and explain the activity to be tackled in the next lesson. (5 minutes)

Lesson 4

1. Review outcomes of the lessons so far - a quick overview of each market structure may be given here to refresh student memories. (7 minutes)
2. Give out the Activity. Explain the task and the aims of the Activity. Link the aims to the discussions carried out in the lessons so far. (8 minutes)
3. Set students onto the task. The students can work together in pairs or threes or could do the task individually. (40 minutes)
4. Review the outcome of the lesson. (5 minutes)

Extension Activities

The Biz/ed objective tests can be set to give students practice in such questions and to reinforce their understanding of the diagrammatic representations. (See the Activity for the links to these areas). Such a task will be of particular relevance to those following the Edexcel course - the teacher/lecturer can also ask students to write a short justification for their answer in line with the Edexcel mode of assessment.

Students should also be given a past paper question as a follow up piece of assessment work to facilitate familiarity with the type of assessment they will face and to provide the opportunity to practice higher order skills necessary at this level.