Students will understand what businesses are, that a marketplace exists whenever buyers and sellers exchange goods and services, and that there is competition in the market place if you have more than one seller of the same item or similar items.
- Explain that businesses make money by selling items or providing a service to a consumer.
- Explain that a market exists when buyers and sellers interact.
- Explain that competition exists in the marketplace if there are multiple sellers of same item or similar items.
- Identify business competitors in their community.
What is Competition?
Ask your students if they have ever run a race, entered an art contest, or played in a soccer game. Explain to them that races, art contests, and soccer games are all competitions. A competition is when people try their best to do something better than other people so they can win. Today your students will learn about a different kind of competition. More specifically, they will learn about business competition.
- Interactive Activity: Students will learn about competition in business.
Smallville Yellow Pages!
- Berkley Career Center: This is the teen’s online guide to business, careers, investing, and entrepreneurship, offering in-depth content with a young edge written for and by teens. In the article "Got Competition?" teen business owners discuss competition.
- Competition Pizza!: This is a great follow up lesson on competition.
What Is A Business?
A business tries to make money by selling goods or providing a service. Below is a list of a few possible businesses in your community. Ask your students if they can think of more?
- grocery stores
- clothing store
- jewelry store
- discount store
- car repair shop
- hair cutting salon
- doctor's office
- dentist's office
- accountant's office
- dry cleaners
- movie theater
Talk with your students about the market economy that exists in the United States. Buying and selling creates the marketplace. Businesses are sellers. They sell goods and services to make money. People who pay for goods and services are called buyers. Buyers and sellers come together in the marketplace.
Competition in the Marketplace
Do your students know a store that sells candy? Do they know a second, different, store that sells candy? Explain to your students that those two stores are competitors. They are competing for your money. Both stores want you to buy their candy.
When two or more businesses sell the same goods or service, they are competing for the same market. When businesses compete, they try to find ways to get you to choose them. Buyers get to choose where to spend their money. This is competition in the marketplace.
Competition in Your Community
Help your students to notice that there are competing businesses all around us.
- Burger King© and McDonalds© are two hamburger restaurants.
- Both sell soda, french fries, and hamburgers.
- Both want you to eat at their restaurant.
- Both want you to spend your money at their restaurant.
Because they sell similar items, they are called competitors.
Target©, K-Mart©, and Wal-Mart ©
- All three businesses sell clothing, food, and toys.
- All three offer low prices.
Because they sell similar items, they are called competitors. Ask your students if they can think of different examples of competitors in their community.
Burgers and Shoes!
- Burger King© sells soda, french fries, and hamburgers.
- ShoeTown sells shoes, boots, and sneakers.
- Both businesses want your money.
Burger King© only competes in the burger market with other burger sellers, trying to attract burger buyers. ShoeTown competes in the shoe market with other shoe stores, wanting shoe buyers to come to shop. So Burger King© and ShoeTown are not competitors: They do not compete in the market for the same customers.
Interactive Activity: Let's Find the Competitors!
Show your students that many businesses are listed in the yellow pages of the phone book. These businesses want people to shop at their stores. Some of the businesses have competition. Tell the students that they will look at the yellow pages for Smallville in order to identify competing businesses. Click here to look at the Smallville Yellow Pages!
As a class, discuss the following questions:
- What are businesses?
- What is the marketplace?
- Do Sears, Pizza Hut, and Joe's Car Repair shop compete in the same markets?
- If not, who does compete in those markets?
- Name competitors in your community. How do you know they are competitors?
- What are some ways competitors try to get your business?
Thank you for learning about competition in the marketplace. Some students may want to learn what teen business owners say about competition; direct them to the Berkley Career Center .
[Note to teacher: This is somewhat difficult for young students to find based on the way the YoungBiz site is constructed. You will need to find the article, "Got Competition?" The easiest way to locate it is to go the home page (linked above). Once there, use the YoungBiz search engine and type in "got competition". This will take you to a list of articles with those words in it. The piece you are looking for is titled, "Got Competition?"]
Have students print out their answers to the Smallville Yellow Pages interactive activity for review.
Teachers can follow up this lesson with the EconEdLink lesson titled Competition: Pizza!
“This lesson may be one of my favorite lessons that I have reviewed. I feel that the lesson is completely developmentally appropriate. I do not think I would need to cut out any of the information and I feel that it is a good length. I love the examples given to help demonstrate what competition is and how market competition is explained. The interactive website is also very good for this lesson. I think that it is a positive that it only gives two choices for the children to make the correct match rather than many choices. This better ensures their success and understand! Two thumbs up for this lesson!”