industry econ

Leggings: Which trends shifted demand for leggings to the right, and what was the result?

Athleisure, comfort, fabric innovations, inclusion, and sustainability. Result: significant market growth.

Leggings: What happens to the market when demand and profits are high?

New competitors enter, splitting the market into a premium category and a budget category.

Leggings: What are legging brands' variable costs?

Fabric, labor, and shipping.

Leggings: What are legging brands' fixed costs?

Design teams, stores, advertising, and sponsorships.

Leggings: How does Lululemon use comparative advantage?

It capitalizes on countries' comparative advantages in fabric production, manufacturing, and raw materials. It manufactures 40% of its products in Vietnam.

Leggings: Why can premium brands act as price makers, and what market structure does this contribute to?

Their image and designs give them power and loyalty. This contributes to an oligopoly.

Tires: What is the tire industry's market structure and barrier level?

Oligopoly with high barriers to entry and exit.

Tires: What kind of externality does the tire industry produce?

Negative externalities.

Tires: How does the government regulate the tire industry?

Through taxation and quality standards.

Tires: What is the history of natural rubber's market structure?

Natural rubber was monopolized.

Tires: What determines the price of synthetic rubber?

Oil prices.

Tea: Which countries are the major tea producers?

China, India, and Kenya.

Tea: What connects tea producers with consumers worldwide?

International trade.

Tea: What market structure is the branded tea market closer to, and why?

Monopolistic competition (not monopoly), because many competing brands sell differentiated products.

Tea: What factors influence tea supply, demand, and equilibrium prices?

Weather, labor costs, consumer preferences, and substitute goods.

Tea: How can automated tea harvesting affect costs and supply?

It reduces variable labor costs and increases supply.

Tea: What is the downside of automated tea harvesting for profitability?

Higher fixed costs and maintenance expenses affect profitability.

CPR Training: Which organizations provide CPR certification, and how?

Organizations like the Red Cross and AHA provide certification programs through instructors.

CPR Training: How do employer requirements affect the market structure?

They create barriers to entry and can give established organizations monopoly-like power.

CPR Training: What costs do training providers face?

Both fixed and variable costs.

CPR Training: How do employment requirements affect demand for CPR certification?

They influence (drive) demand for certification.

CPR Training: What can influence whether providers invest in more representative equipment?

The cost of female-anatomy manikins.

Indie Games: Why is making an indie game cheap, and what type of cost dominates?

Game engines are free for small developers and it costs $100 to sell on Steam, so most costs are fixed costs.

Indie Games: What happened to the supply of indie games and why? Give the numbers.

Supply shifted right because games are cheaper to make: about 19,000 games on Steam in 2025 vs. 14,000 in 2023.

Indie Games: What is Steam's role and why does it have monopoly-like power?

Steam, run by Valve, is the main store for PC games and takes a 30% cut of most sales.

Indie Games: What legal action was taken against Valve?

Developers sued Valve under the Sherman Anti-Trust Act; the case is still in court.

Sports Drinks: Who owns the three biggest U.S. sports drink brands, and what share do they hold?

PepsiCo and Coca-Cola; 87.9% of sales.

Sports Drinks: What market structure is this, and what protects it?

An oligopoly protected by high fixed costs like plants, distribution, and marketing deals.

Sports Drinks: Why do brands keep changing their products?

Customers' health kicks change and rivals respond.

Sports Drinks: Timeline of product responses (Gatorade G2, Powerade Zero, Gatorade Zero, Lower Sugar)?

Gatorade G2 (2007), Coke's Powerade Zero (2008), Gatorade Zero (2018), Lower Sugar (2026).

Sports Drinks: How did BodyArmor perform relative to what Coke paid, and what were the write-offs?

Sales fell short of the $5.6 billion Coke paid in 2021; Coke wrote off $760 million in 2024 and $960 million in 2025.

Sports Drinks: What did Prime show?

Hype can get a brand in fast but not keep it there.

Sports Drinks: What effect did customers moving to healthier functional drinks have?

Demand shifted left, cutting Gatorade's 2024 volume about 5%.

Sports Drinks: How does a price change differ from a demand shift?

A price change only moves buyers along the curve (movement along, not a shift).

K-Pop: What has K-pop evolved into, and what has it benefited from?

A multibillion-dollar industry and major South Korean export, benefiting from specialized infrastructure, established training systems, and global demand.

K-Pop: What strategies do K-pop companies use to encourage spending and increase profits?

Product differentiation, price discrimination, exclusive merchandise, and fan experiences.

K-Pop: What economic concepts apply to the intensive training system?

Significant investments, sunk costs, and opportunity costs.

K-Pop: What market structure is K-pop, and who dominates it?

Oligopoly dominated by HYBE, SM, JYP, and YG, with high barriers to entry and strategic competition influencing decisions.

Pet Care: How big is the pet care market and how many households support it?

$158B market; 95 million pet-owning households.

Pet Care: What do households do with pet care spending when budgets are lower?

Prioritize necessities and reduce optional purchases.

Pet Care: Why is it hard to increase supply of pet care?

High requirements for veterinary training and accreditation.

Pet Care: What can affect affordability of pet care and consumer surplus?

Prices, insurance, and local competition.

Orthopedic Implants: What is the global market size now and projected, and why the growth?

$50 billion now; projected $80 billion by 2034 due to an aging population.

Orthopedic Implants: What market structure is it, who leads, and what protects them?

Oligopoly led by Zimmer Biomet, Stryker, and DePuy Synthes, protected by loyalty and private contracts.

Orthopedic Implants: What is the path of an implant, and why does the chooser rarely see the price?

Surgeon chooses it, hospital buys it, Medicare/insurance pays, so the person choosing rarely sees the price.

Orthopedic Implants: How does confidentiality in selling enable price discrimination?

Makers can charge different hospitals different prices.

Orthopedic Implants: How much could capping joint replacement payments save taxpayers?

$4.4 billion a year.

Skin Care: Which perfect competition characteristics does skincare have, and what prevents it from being perfectly competitive?

Many competing firms, relatively low barriers to entry, numerous substitutes; brand differentiation prevents perfect competition.

Skin Care: What decreases supply?

Raw material costs or regulations that increase production expenses.

Skin Care: What increases supply?

Technological improvements and new firms entering the market.

Skin Care: How do large companies like L'Oréal maintain market power?

Brand loyalty, economies of scale, and extensive distribution networks, despite competition from smaller brands.

Skin Care: What type of good is skincare, and what happens to demand as income rises?

Normal good; demand increases as consumer income rises.

Skin Care: What else can increase skincare demand?

Social media trends and changing consumer preferences.