Activity: Cartels and Competition

Video Demonstration:

Concepts:

  • Incentives matter
  • Increases in supply lead to reductions in price
  • Cartels increase their profits and market prices by restricting production
  • Desire for profit undermines cartel agreements

Materials:

(See activity guide under support materials for all handouts, procedures, and visuals.)

  • Balance Sheet – 1 per team
  • Production Decision Cards – 25 to 30 cards per game
  • Production Decision Worksheet – 1 per student
  • Demand Forecast (overhead transparency)
  • Market Demand (actual) (overhead transparencies)
  • Production Record (1 overhead transparency)
  • Prizes for companies making more than $300
  • Grand prize for most profit
Support Materials

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