The Tent Mogul

Ben and Tom aren’t happy with the high tent prices and add-ons at one tent rental shop, so they try to go to a competitor only to find that all of the tent rental places have the same owner who is happy to exploit his market power.


Tommy’s Closet vs. Rent-A-Swag

Tom gets an offer that someone is interested in buying his business. After some though, Tom chooses not to sell his clothing rental business and then finds out that the potential buyer will now try to drive him out of business by setting up across the street. Monopolistic competition allows for easy entry and exit into a market that is profitable and results in a reduction in long term profits.

Ron’s Endorsement

Ron won’t endorse a product unless he uses it exclusively and actually believe in it. Firms in imperfect markets often use celebrity advertising because it serves as a signal that the person selling the product actually believes in the product.

Market Power with 22 White Vans

A spike in demand for white vans leads the local van rental company with the opportunity to capitalize.