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Econ- Lipgloss

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Janice Yang

on 21 March 2013

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Transcript of Econ- Lipgloss

By: Sarrah Hakim, Meghan Patero, & Janice Yang Lip Gloss Little but some price setting power
Multiple firms
Make abnormal profit in short run but not in the long run
Competitors enter and exit the market frequently
Not as efficient as perfect but more than monopoly or oligopoly Price Setting Power Prices ranged from $1.80 to $30 Type of Product Lip gloss is differentiated Number of Firms Large number of firms Introduction Product: lip gloss Monopolistic Competition List of competitors
Bath & Body Works
Victoria's Secret
For Love 21
The Body Shop
Bare Minerals
M. A. C.
Juicy Couture Bath & Body Works: $7.50, $8
Victoria's Secret: $9.00
For Love 21: $1.80, $2.80
The Body Shop: $6
Sephora: $10 to $15, $20 to $$30
Bare Minerals: $15, $18
Aveda: $14, $23
Origins: $16
M. A. C.: $15, $20
Juicy Couture: $25 Lip gloss is sold at many stores
Some stores specialize in makeup (Sephora, M.A.C.)
Lip gloss is not the main product for other stores (For Love 21, Bath & Body Works) Bath & Body Works: more variety, lip balms, shiny, sparkly, minty, clear, scented
Victoria's Secret: stays on well, charm on the end, thicker but doesn't stick
For Love 21: chemically different, different colors
The Body Shop: ethical, cruelty free, no animal byproducts, vegan, 100% gluten free, allergen free
Sephora: higher quality ingredients, doesn't smell
Bare Minerals: all minerals, no additives or preservatives
Aveda: all natural, 98% naturally derived
Origins: as natural as possible, all natural base
M. A. C.: variety of choice & color, vanilla & vitamin E
Juicy Couture: in a set with a fragrance Bath & Body Works Victoria's Secret Aveda For Love 21 The Body Shop Sephora Bare Minerals Origins M.A.C. Juicy Couture Normal Profit Abnormal Profit Loss abnormal profit Bare Minerals, L'Oréal (The Body Shop), LVMH (Sephora), Limited Brands (Bath & Body Works, Victoria's Secret), Estée Lauder (Origins, Aveda, M. A. C.) loss Frequency of Competitors Entering & Exiting the Market Bath & Body Works: long time
Victoria Secret: long time
For Love 21: 5-6 years
The Body Shop: very long time
Sephora: since they started
Bare Minerals: 35 years
Aveda: long time, few years after they started
Origins: since 1991 (when they started)
M. A. C.: since 1984, started with lip products
Juicy Couture: seasonally for 5 years Relatively frequent - ones that started with lip products have been in the market for a while; others have entered recently Efficiency Not allocative b/c Q1<Qso
Not productive b/c not at min. ATC point None of the firms were efficient
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