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CHAPTER 10
MONOPOLISTIC COMPETITION AND OLIGOPOLY
In this chapter, you will find:

Chapter Outline with PowerPoint Script
Chapter Summary
Teaching Points (as on Prep Card)
Answers to the End-of-Book Questions and Problems for Chapter 10
Supplemental Cases, Exercises, and Problems
INTRODUCTION
Students have now been introduced to the polar cases of perfect competition and monopoly, but most firms in
the economy are neither. This chapter examines two market structures—monopolistic competition and
oligopoly—that characterize most firms in business today. The model of monopolistic competition is
considered along with several models of oligopoly: collusion and cartels, price leadership, and game theory.
The interdependence of oligopolistic firms is noted to complicate analysis of firm behavior.
LEARNING OUTCOMES
1 Discuss factors that lead to monopolistic competition
Monopolistic competition describes a market in which many producers offer products that are substitutes but are not
viewed as identical by consumers. Product differentiation allows each supplier some power over the price it can
charge. Because barriers to entry are low, there are enough sellers that they behave competitively and act
independently.
Monopolistic competition contains elements of both monopoly and competition. Monopolistic competition
is like monopoly in the sense that firms in each industry face demand curves that slope downward. Monopolistic
competition is like perfect competition in the sense that easy entry and exit eliminate economic profit or economic
loss in the long run.
2 Explain the concept of oligopoly

An oligopoly is an industry dominated by just a few firms. Oligopolists are said to be interdependent since each one
must consider the effect of its own actions on competitors’ behavior. The formation of an oligopoly can often be
traced to some form of barrier to entry, such as economies of scale, legal restrictions, brand names built up by years
of advertising, or control over an essential resource.
3 Describe models of oligopoly

There is no general theory of oligopoly but rather a set of theories, each based on the diversity of observed behavior
in an interdependent market. The theories that are used to explain oligopoly behavior are collusion, price leadership,
and game theory. These models identify formal and informal efforts to collude and the strategic decision-making
process that firms employ when collusion does not occur.
4 Explain how game theory helps predict cartel behavior

Game theory examines oligopolistic behavior as a series of strategic moves and countermoves among rival firms.
This approach analyzes the behavior of decision makers, or players, whose choices affect one another. While
participation in a cartel would result in higher economic profits, game theory explains why the incentives to cheat
are so great that firms often act in ways that result in lower profits.
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Chapter 10 Monopolistic Competition and Oligopoly 146
5 Compare oligopoly and perfect competition

With monopolistic competition, there are so many firms in the market that each behaves independently. But with
oligopoly, there are so few firms in the market that each must consider the impact its pricing, output, and marketing
decisions will have on other firms. Each oligopolist behaves interdependently, and this makes oligopoly difficult to
analyze. In general, price and profits are usually higher under oligopoly.
CHAPTER OUTLINE WITH POWERPOINT SCRIPT
USE POWERPOINT SLIDES 2-3 FOR THE FOLLOWING SECTION

Monopolistic Competition: This section relies on Edward Chamberlin’s model.
Characteristics of Monopolistic Competition: A market structure characterized by a large number of firms
selling products that are close substitutes, yet different enough that each firm’s demand curve slopes
downward. Each supplier is a price maker. Barriers to entry are low and firms can enter or leave the industry
in the long run. Sellers also behave competitively.
• Product Differentiation
• Physical Differences: Physical appearance and qualities.
• Location: The number and variety of locations where product is available.
• Services: Accompanying services provided.
• Product Image: Image producer tries to convey to the buyer about the product’s quality.

Short-Run Profit Maximization or Loss Minimization: Elasticity of demand for a monopolistic
competitor depends on the number of rival firms and the firm’s ability to differentiate its product.
• Marginal Revenue Equals Marginal Cost: Monopolistic competition maximizes profit in the short
run just as a monopolist does. Profit maximizing quantity is where marginal revenue equals marginal
cost; profit maximizing price for that quantity is found on the demand curve.
• Maximizing Profit or Minimizing Loss in the Short Run: As long as the price is at or above
average variable cost, the firm should produce in the short run.

Zero Economic Profit in the Long Run: Because market entry is easy, monopolistically competitive firms
earn zero economic profit in the long run. Monopolistically competitive firms spend large amounts on
advertising, which contributes to an increase in average costs.

CaseStudy: Fast Forward to Creative Destruction

Monopolistic Competition and Perfect Competition Compared: If the two types of firms have the
same cost curves, the monopolistic competitor produces less and charges more than the perfect competitor,
exhibiting excess capacity in the long run.

An Introduction to Oligopoly: An industry characterized by just a few firms whose behavior is
interdependent.
Varieties of Oligopoly: In some industries the product is homogeneous; in others, it is differentiated across
producers.
• Undifferentiated Oligopolies: Sells a commodity.
• Differentiated Oligopolies: Sells products that differ across producers.

Economies of Scale: If a firm’s minimum efficient scale is relatively large compared to industry output, only a
few firms are needed to satisfy industry demand.
High Cost of Entry: High start-up costs and established brand names deter new entrants.
Crowding Out the Competition: Multiple products from the same brand crowd out new entrants.
USE POWERPOINT SLIDE 22 FOR THE FOLLOWING SECTION

Models of Oligopoly: Because oligopolists are interdependent, no one general theory of oligopoly explains
their behavior, but several theories have been developed.

Collusion and Cartels:
• Collusion is an agreement among firms in the industry to divide the market and to fix the price.
• A cartel is a group of firms that agree to collude, thus they act as a monopoly.
• Effective functioning of a cartel is complicated by:
⎯ Differences in Cost: If average costs differ across firms, output allocation that maximizes cartel profit
yields unequal profits for cartel members.
⎯ Number of Firms in the Cartel: Consensus becomes harder to achieve as the number of firms in the
cartel grows.
⎯ New Entry into the Industry: New entrants increase market supply, thus driving prices down.
Therefore, a cartel’s success depends on barriers that block entry of new firms.
⎯ Cheating: Powerful temptation to cheat on agreement undermines cartels.
OPEC’s Spotty History

Price Leadership: A price leader is a firm whose price is adopted by the rest of the industry.
Obstacles:
 violates U.S. antitrust laws;
 the greater the product differentiation, the less effective price leadership is;
 no guarantee other firms will follow;
 profitable prices attract new entrants so barriers to entry are needed; and,
 temptation to cheat.

Game Theory: a model that analyzes oligopolistic behavior as a series of strategic moves and countermoves
by rival firms.
• Prisoner’s Dilemma: a game that shows why players have difficulty cooperating even when both players
would benefit from cooperation.
• Strategy: In game theory, the operational plan pursued by a player.
• Payoff matrix: In game theory, a table listing the payoffs that each player can expect based on the
combination of strategies that each player pursues.
• Dominant–strategy equilibrium: the outcome achieved when each player’s choice does not depend on
what he thinks the other player will do.
• Price-Setting Game: Applies the prisoner’s dilemma to pricing strategies.
One shot versus repeated games
One shot: Prisoner’s dilemma strategy.
Repeated game: Tit for Tat Strategy.
Coordination Game: Nash equilibrium
Summary of Oligopoly Models: Each model helps explain a phenomenon observed in oligopolistic markets.

Comparison of Oligopoly and Perfect Competition: There is no single model of oligopoly.
• Price Is Usually Higher under Oligopoly: Price is usually higher and output lower under an
oligopoly.
• Higher Profits under Oligopoly: Profit in the long run should be higher under oligopolies than under
perfect competition.

Comparison of Market Structures
CHAPTER SUMMARY
Whereas the output of a monopolist has no close substitutes, a monopolistic competitor must contend with
many rivals. But because of differences among the products offered by different firms, each monopolistic
competitor faces a downward-sloping demand curve.
Sellers in monopolistic competition and in oligopoly differentiate their products through (a) physical qualities,
(b) sales locations, (c) services offered with the product, and (d) the product image.
In the short run, monopolistic competitors that can at least cover their average variable costs maximize profits
or minimize losses by producing that quantity where marginal revenue equals marginal cost. In the long run,
easy entry and exit of firms means that a monopolistic competitor earns only a normal profit, which occurs
where the average total cost curve is tangent to the downward-sloping demand curve for the firm’s product.
An oligopoly is an industry dominated by a few sellers. In undifferentiated oligopolies, such as steel or oil, the
product is a commodity—meaning that it does not differ across firms. In differentiated oligopolies, such as
automobiles or breakfast cereals, the product differs across firms.
Because an oligopoly consists of just a few firms, each may react to another firm’s changes in quality, price,
output, services, or advertising. Because of this interdependence, the behavior of oligopolists is difficult to
analyze. No single approach characterizes all oligopolistic markets.
In this chapter, we considered three approaches to oligopoly behavior: (a) collusion, in which firms form a
cartel to act collectively like a monopolist; (b) price leadership, in which one firm, usually the biggest one, sets
the price for the industry and other firms follow the leader; and (c) game theory, which analyzes oligopolistic
behavior as a series of strategic moves by rival firms.
The prisoner’s dilemma game shows why each player has difficulty cooperating even though all players would
be better off if they did. In a variety of decisions such as what price to charge ad how much to spend on
marketing, rival firms could increase profit by cooperating. Yet each faces incentives that encourage
noncooperation.
TEACHING POINTS
1. A point that may be useful to stress in your lecture is that monopolistic competition is an intermediate
market structure that displays characteristics of both perfect competition and monopoly. Like perfect
competition, there are many buyers and sellers and there is free entry and exit of firms. Like monopoly
(because products are not perfectly substitutable), each firm faces a downward-sloping demand curve for
its product and thus has some influence over price. Therefore, like a monopoly, the monopolistically
competitive firm always prices its product above its marginal cost of production. In the long run, the
monopolistically competitive firm earns only a normal profit, as is the case for the perfect competitor.
2. Monopolistic competition is sometimes called the “brand name” model of market structure because firms
may choose to differentiate their products by means of brand names and then compete on the basis of
advertising as well as price. However, as the text points out, monopolistic competition need not require
brand names. Firms may produce a relatively homogeneous product, as in the case of non-specialty steel
or oil. Typically, when advertising is used to differentiate the products of different firms, costs are higher
than they would otherwise be. An interesting question for discussion is whether or not these extra costs
are incurred to offer consumers a choice of varieties. Students are also likely to be interested in
discussing whether it matters if the choice of products involves real differences in product characteristics
or merely the perception that such differences exist.
3. One interesting feature of monopolistic competition is that a firm is in long-run equilibrium when the
demand curve it faces is tangent to its average cost curve. The key concept is that entry of competing
firms shifts the demand curve to the left, reducing profits of each firm as a consequence. The extent to
which the tangency point deviates from minimum average cost is determined by the degree to which the
entering firms can closely duplicate the product of already successful firms. The closer competitors are to
each other, the flatter each firm’s demand curve is, and the closer the tangency is to minimum average
cost. The efficiency implication of this is that the same total output could be produced at a lower resource
cost if there were fewer firms, yet a less differentiated product would be the result.
4. You may wish to examine a number of industries with many products (e.g., cereals, soaps) to determine
whether they are monopolistically competitive or oligopolistic. The idea that individual firms
deliberately market sets of products that compete with each other may seem irrational to some students.
A discussion of why firms might do this gives a real-world flavor to the analysis of industry behavior and
leads directly into the theory of oligopoly.
5. The latter part of the chapter is devoted to a discussion of oligopoly—the kinked demand model is not
covered but the discussion of game theory is enhanced. The text considers cartels, price leadership, and
game theory models.
6. While a variety of models have been developed to explain firm behavior in oligopolistic industries, since
no one model characterizes the structure, this makes oligopoly analysis difficult yet fascinating for
economic researchers. This variation in firm behavior often occurs because of different operating
assumptions by the firms, a situation highlighted in the game theory approach.
7. A good example of an oligopoly is the toothpaste industry. The firms involved parry back and forth with
“new, improved formulas.” They segment the market by appealing to the young, the old, and smokers. If
any particular brand “catches fire” and sales are hot, very similar products are almost immediately
introduced. The same may be said for soaps and laundry detergents.
ANSWERS TO END-OF-BOOK QUESTIONS AND PROBLEMS

1.1 (Short-Run Profit Maximization) A monopolistically competitive firm faces the following demand and
cost structure in the short run:
Output Price FC VC TC TR Profit/Loss

0 $100 $100 $ 0 ____ ____ ________
1 90 ____ 50 ____ ____ ________
2 80 ____ 90 ____ ____ ________
3 70 ____ 150 ____ ____ ________
4 60 ____ 230 ____ ____ ________
5 50 ____ 330 ____ ____ ________
6 40 ____ 450 ____ ____ ________
7 30 ____ 590 ____ ____ ________
a. Complete the table.

b. What is the highest profit or lowest loss available to this firm?
c. Should this firm operate or shut down in the short run? Why?
d. What is the relationship between marginal revenue and marginal cost as the firm increases output?
a. Output Price FC VC TC TR Profit/Loss

0 $100 $100 $0 $100 $0 -$100
1 90 100 50 150 90 –60
2 80 100 90 190 160 –30
3 70 100 150 250 210 –40
4 60 100 230 330 240 –90
5 50 100 330 430 250 –180
6 40 100 450 550 240 –310
7 30 100 590 690 210 –480
b. The lowest loss is $30.

c. The firm should continue to produce up to and including 2 units because marginal revenue still
exceeds marginal cost. [See answer to part (d).] In addition, at that quantity, price exceeds average
variable cost. Operating in that range allows the firm to cover at least a portion of the fixed costs
($100) that would not be covered at all if the firm shut down. Specifically, the firm should produce 2
units.
d. Through 2 units of output, marginal revenue exceeds marginal cost. Beyond 2 units, marginal cost
exceeds marginal revenue.
1.2 (Monopolistic Competition and Perfect Competition Compared) Illustrated below are the marginal cost
and average total cost curves for a small firm that is in long-run equilibrium.
a. Locate the long-run equilibrium price and quantity if the firm is perfectly competitive.
b. Label the price and quantity p1 and q1.
c. Draw in a demand and marginal revenue curve to illustrate long-run equilibrium if the firm is
monopolistically competitive. Label the price and quantity p2 and q2.
d. How do the monopolistically competitive firm’s price and output compare to those of the perfectly
competitive firm?
e. How do long-run profits compare for the two types of firms?
(a), (b), and (c)
(d) The monopolistically competitive firm’s price is higher and its output is lower.
(e) Both types of firms earn zero long-run economic profits.
2.1 (Varieties of Oligopolies) Do the firms in an oligopoly act independently or interdependently? Explain
your answer.
Firms in an oligopoly act interdependently. This means that the demand for one firm’s output depends on
the actions of its rival firms. This makes decision making difficult regarding price and output levels.
Oligopolists try to reduce uncertainty about their demand by engaging in behavior that makes their
rivals’ actions more predictable (colluding, forming cartels, using price leadership) or by assuming
certain actions by their rivals.
3.1 (Price Leadership) Why might a price–leadership model of oligopoly not be an effective means of
collusion in an oligopoly?
Price leadership is subject to a variety of obstacles. It violates antitrust law. The greater the product
differentiation among sellers, the less effective price leadership becomes. There is no guarantee others
will follow the price leader. Some firms may cheat on the price. A profitable price may attract new
entrants unless there are barriers to entry.
3.2 (Collusion and Cartels) Why would each of the following induce some members of OPEC to cheat on
their cartel agreement?
a. Newly joined cartel members are less–developed countries.

b. The number of cartel members doubles from 12 to 24.
c. International debts of some members grow.
d. Expectations grow that some members will cheat.
a. Many of the OPEC countries are less developed and need oil revenues to help diversify their
economies. If the underdevelopment or slow growth continues while the rest of the world continues
to grow, there will be an incentive for such countries to boost production and attempt to improve
their economies.
b. The larger the number of firms in the cartel, the more difficult it is to reach a consensus on the
allocation of output among members. As the size of the cartel increases, motivation to cheat
increases, and it becomes more difficult to track each member’s output.
c. To pay their loans expeditiously, such countries may resort to increased production and sales, thus
cheating on the quotas.
d. Each member expects that other members will cheat, and therefore cheats also.
4.1. (Collusion and Cartels) Use revenue and cost curves to illustrate and explain the sense in which a cartel
behaves like a monopolist.
Suppose all firms in an industry formed a cartel. Given the market demand curve, D, the cartel must
maximize its profit. Its first task is to determine its marginal cost of production. Because a cartel acts like
a monopoly that runs many plants, the marginal cost curve for the cartel (MC) is the horizontal sum of
each firm’s marginal cost curve. The cartel’s marginal cost curve intersects the market’s marginal
revenue curve to determine output that maximizes the cartel’s profit. This intersection yields quantity Q.
The cartel’s price, p, is read off the demand curve at that quantity.
4.2 (Game Theory) Suppose there are only two automobile companies, Ford and Chevrolet. Ford believes
that Chevrolet will match any price it sets, but Chevrolet too is interested in maximizing profit. Use the
following price and profit data to answer the following questions.
Ford's Chevrolet's Ford’s Chevrolet’s

Selling Selling Profits Profits
Price Price (millions) (millions)
$ 4,000 $ 4,000 $ 8 $ 8
4,000 8,000 12 6
4,000 12,000 14 2
8,000 4,000 6 12
8,000 8,000 10 10
8,000 12,000 12 6
12,000 4,000 2 14
12,000 8,000 6 12
12,000 12,000 7 7
a. What price will Ford charge?

b. What price will Chevrolet charge once Ford has set its price?
c. What is Ford’s profit after Chevrolet’s response?
d. If the two firms collaborated to maximize joint profits, what prices would they set?
e. Given your answer to part (d), how could undetected cheating on price cause the cheating firm’s
profit to rise?
a. $8,000. Under the matching assumption (If Ford and Chevrolet both charge $4,000, the profits
would be $8; if they both charge $8,000, the profits are $10; and if they both charge $12,000, the
profits will be $7), Ford’s profits of $10 million are higher than those for any other price.
b. If Ford charges $8,000, Chevrolet maximizes its profits ($12 million) by charging $4,000.
c. If Chevrolet is charging $4,000 and Ford is charging $8,000, Ford’s profit is $6 million.
d. Both companies would set the price at $8,000, making total profits of $20 million that would be split
equally between them. Any other price combination lowers joint profit.
e. Chevrolet could increase its profits to $12 million by cutting its price to $4,000 (if undetected). Ford
could also increase profits to $12 million by cutting its price to $4,000 (if undetected).
4.3 (Game Theory) While grading a final exam, an economics professor discovers that two students have
virtually identical answers. She is convinced the two cheated but cannot prove it. The professor speaks
with each student separately and offers the following deal: Sign a statement admitting to cheating. If
both students sign the statement, each will receive an “F” for the course. If only one signs, he is allowed
to withdraw from the course while the other student is expelled. If neither signs, both receive a “C” since
the professor does not have sufficient evidence to prove cheating.
a. Draw the payoff matrix.
b. Which outcome do you expect? Why?
a. The payoff matrix is
Student A signs Student A does NOT sign
Student B signs A gets an F; B gets an F A is expelled; B withdraws
Student B does NOT sign A withdraws; B is expelled A gets a C; B gets a C
b. While it would be best for both students if each refused to sign, the most likely outcome is that both
students sign and receive an “F.” This is because failure to sign could lead to expulsion. Unless
each student can somehow ensure the other will not sign, the threat of expulsion will most likely lead
to each signing the statement.
5.1 (Market Structures) Determine whether each of the following is a characteristic of perfect competition,
monopolistic competition, oligopoly, and/or monopoly:
a. A large number of sellers

b. Product is a commodity
c. Advertising by firms
d. Barriers to entry
e. Firms that are price makers
a. Perfect competition and monopolistic competition

b. Perfect competition
c. Monopolistic competition and oligopolies with differentiated products; some monopolies
d. Oligopoly and monopoly
e. Monopolistic competition, oligopoly, and monopoly
SUPPLEMENTAL CASES, EXERCISES, AND PROBLEMS
Case Studies
These cases are available to students online at www.cengagebrain.com.
Fast Forward to Creative Destruction

The introduction in the 1970s of videocassette recorders, or VCRs, fueled demand for videotaped movies,
which were originally so expensive ($75 to $100) that renting was the only way to go. The first wave of video
rental stores required security deposits and imposed membership fees of up to $100. In those early days, most
rental stores faced little competition so many outlets earned short-run economic profit. But because entry was
relatively easy, this profit attracted competitors. Convenience stores, grocery stores, bookstores, even
drugstores began renting videos as a sideline. Between 1982 and 1987, the number of rental outlets
quadrupled, growing faster than VCR purchases.
Thus, the supply of video rentals increased faster than the demand. The 1990s brought more bad news for
the industry, when hundreds of cable channels and pay-per-view options offered close substitutes for video
rentals. The greater supply of rental outlets along with the increased availability of substitutes had the
predictable effect on market prices. Rental rates crashed to as little as $0.99. Membership fees and tape
deposits disappeared. So many outlets gave up on the business that a market developed to buy and resell their
tape inventories.
The video rental business grew little during the 1990s. Even after the addition of DVDs and video games,
the industry “shakeout” continued. One rental chain, Blockbuster, bought up weaker competitors and
eventually accounted for more than a third of the U.S. market, with over 6,000 outlets. But Blockbuster faced
its own growing pains, including an “excess inventory” of tapes and a failed effort to sell books, magazines,
and snacks at its rental stores.
The latest threats to Blockbuster and other bricks-and-mortar rental stores are (1) on-demand movies
delivered by broadband cable, (2) downloads from the Internet, (3) grab-and-go rental kiosks such as Redbox,
and (4) online rental services that mail DVDs, such as QwikFliks and Netflix (Netflix offers 100,000 movie
titles and mails out 2 million DVDs a day). In other developments, Wal-Mart bought Vudu in 2010 to stream
movies over the Internet in high definition using Vudu’s compression technology. And Best Buy teamed up
with Cinema Now to stream movies online. Other download competition came from Amazon.com’s Unbox,
Microsoft’s Xbox, Apple TV, and Netflix (half of Netflix’s 12 million subscribers stream movies).
Technological change has created powerful rivals to the bricks-and-mortar movie rental business.
Competition is fierce. Blockbuster announced in 2010 that it planned to close 1,560 of its remaining 3,750
outlets and warned that it may be forced into bankruptcy. As a measure of how far Blockbuster’s fortunes have
fallen, in 2002 the company stock sold for about $30 per share. By September 2010, the price was less than 10
cents a share. Such is the dynamic nature of a market economy—out with the old and in with the new, in a
competitive process that has been aptly called creative destruction. This destruction is no fun for producers on
the losing end, but consumers benefit from a wider choice and more competitive prices.
Sources: James Jarman, “Video Stores Crippled by Online, Kiosk, Mail Services,” Arizona Republic, 27
February 2010. Mary Ellen Lloyd, “Blockbuster Considers Bankruptcy Filing,” Wall Street Journal, 17 March
2010; and Stephen Grocer, “Wal-Mart Pays Up for Vudu. Should It Have Bought NetFlix?,” Wall Street
Journal, 22 February 2010..
Timely Fashions Boost Profit for Zara

One way a firm can increase market power is to offer a differentiated product. Zara, the largest fashion retailer
in Europe, has been described as “possibly the most innovative and devastating retailer in the world.” The
company makes much of its clothing in its own workshops and factories, including designing, fabric dyeing,
tailoring, and ironing. Zara also outsources some manufacturing to select suppliers that have developed the
ability to make high-quality garments with the required flexibility and speed.
Zara’s network of retail shops and clothing factories communicate through a sophisticated feedback
mechanism for gathering market intelligence and putting it to work. Sales associates carry personal digital
assistants to relay information on fashion trends and customer demand back to the company’s team of 200
designers in Spain. Real-time sales data allow the factory to increase production of items that are selling and to
bring out similar designs. Direct shipments from factory to shops also eliminate the need for costly
warehouses.
Zara takes as little as two weeks to develop a new item and deliver it to one of its more than 1,000 retail
stores. The industry average is six months. The company launches about 10,000 new designs a year, making
new items in small batches at first so if something doesn’t sell, there is not much left over. But if something
catches on, stores can restock in a few days, so Zara doesn’t miss out on a fashion wave. Thus, shops never
have to wait long for fresh stock or to get an order filled. Whereas traditional stores such as the Gap may get
new fashions twice a season, Zara distributes them twice a week. And in perhaps its most unusual of strategies,
the company advertises little, relying instead on prime store location and word of mouth.
In short, Zara believes that making most of its own apparel and selectively outsourcing the rest, reduces
delays, exploits customer feedback, maintains flexibility, and ensures quality. This steady supply of new
clothing lines and continuous supply of popular items help Zara differentiate its products. Amancio Ortega,
Zara’s founder, opened his first store in 1975. With a personal fortune of $25 billion in 2010, he became the
richest person in Spain and the ninth richest on the planet. The market rewards successful innovators.
Sources: Nebahat Tokatli, “Insights from the Global Clothing Industry—The Case of Zara, A Fast Fashion
Retailer,” Journal of Economic Geography, 8 (January 2008): 21–38; Vanessa O’Connell, “How Fashion
Makes Its Way from the Runway to the Rack,” Wall Street Journal, 8 February 2007; “Supply-Chain
Management,” The Economist, 6 April 2009; and “The World’s Billionaires,” Forbes, 11 March 2010.
Experiential Exercises
1. OPEC is the economist’s favorite cartel to study, partly because it had such a spectacular short-run success
and partly because oligopoly theory could be used to predict how OPEC pricing actually evolved. Have
students search for some recent developments in petroleum pricing. How relevant are the factors listed in
this chapter in affecting the difficulty of maintaining a cartel?
2. To find evidence of price leadership, have students check The Wall Street Journal for stories about airfares.
Typically, one airline will raise its fares—on certain routes or across the board—and other airlines will
match those changes within a day or two. Such stories are typically reported on the front page—in the
“What’s News” column. When students find such a story, ask them to check back over the next few days.
Did they find that other airlines matched the leader, or was the leader forced to back off its price changes?
3. (Global Economic Watch) Go to the Global Economic Crisis Resource Center. Select Global Issues in
Context. In the Basic Search box at the top of the page, enter the phrase "product and service
differentiation." On the Results page, go to the News section. Click on the link for the April 1, 2010, article
"Study Results from University of Adelaide Broaden Understanding of Research Policy." According to the
article, are innovation-related activities enough to create product and service differentiation?
No. "The researchers concluded: 'The results contribute to the innovation literature in finding that
innovation-related activities can only drive a firm's competitive advantage when they occur concomitantly
with actual changes in the market position and offerings of firms." In other words, marketing and sales
matter in addition to research and development.
4. (Global Economic Watch) Go to the Global Economic Crisis Resource Center. Select Global Issues in
Context. In the Basic Search box at the top of the page, enter the term "game theory." Write a paragraph
about one example of game theory being used to analyze economic behavior.
Student answers will vary. Look for examples of strategic moves and countermoves.
Additional Questions and Problems

(From student Web site at www.cengagebrain.com)
1. (Characteristics of Monopolistic Competition) Why does the demand curve facing a monopolistically
competitive firm slope downward in the long run, even after the entry of new firms?
The negative slope of the monopolistically competitive firm’s demand curve is the result of product
differentiation. Firms will face perfectly elastic demand curves only if their products are perfect
substitutes for the products of other firms. If firms can successfully differentiate their products in the long
run, the demand curve each firm faces continues to slope downward. Some distinguishing features of a
firm’s product may not be readily duplicated, advertising could help a firm maintain a different image
for its product, or customers may continue to buy a certain firm’s product out of habit.
2. (Product Differentiation) What are four ways in which a firm can differentiate its product? What role can
advertising play in product differentiation? How can advertising become a barrier to entry?
A firm can differentiate its product by varying its physical appearance and qualities, by providing more
and different locations where the product can be purchased, by providing more accompanying services,
or by trying to foster a different image in the consumer’s mind.
Advertising makes the consumer aware of how a firm’s product differs from that of its competitor.
Advertising often emphasizes physical qualities or services, or establishes a brand name. In industries
with high advertising expenses, the cost of entry increases for a new competitor who must compete
effectively with existing firms by matching their high advertising budget. This high cost of entry
represents a potential barrier to entry.
3. (Zero Economic Profits in the Long Run) In the long run, a monopolistically competitive firm earns zero
economic profit, which is exactly what would occur if the industry were perfectly competitive. Assuming
that the cost curves for each firm are the same whether the industry is perfectly or monopolistically
competitive, answer the following questions.
a. Why don’t perfectly and monopolistically competitive firms produce the same equilibrium quantity
in the long run?
b. Why is a monopolistically competitive industry said to be economically inefficient?
c. What benefits might cause us to prefer the monopolistically competitive result to the perfectly
competitive result?
a. In the monopolistic competition case, firms produce where demand is tangent to ATC. The price in
this case is higher than it would be in the competitive industry structure. Therefore, industry output
is lower than in a perfectly competitive market.
b. It is economically inefficient because the same total output could be produced at a lower resource
cost if it were produced by fewer (and therefore larger) firms taking full advantage of economies of
scale. This results in excess capacity.
c. The monopolistically competitive industry produces differentiated products, which apparently give
consumers a wider choice of options.
ANSWERS TO ONLINE CASE STUDIES
1. (CaseStudy: Fast Forward) Use a cost and revenue graph to illustrate and explain the short-run profits in
the video rental business. Then use a second graph to illustrate the long-run situation. Explain fully.
The left-hand panel reflects the short-run situation. At the output level where marginal revenue equals
marginal cost (q1) and profit is maximized, average revenue exceeds average total cost by the distance
ab. The firm charges price p1 and earns profit p1abc1.
The right-hand panel reflects the long-run situation. Short-run profits encourage new firms to enter the
market. As they enter, existing firms start losing sales to the new firms. The existing firms’ demand
curves shift to the left. The process continues until all economic profits are eliminated—that is, until the
demand curve is tangent to the average total cost curve. The representative firm produces lower output
q2 and charges price p2. At that output and price, average revenue equals average total cost, and
economic profit is zero.
2. (Case Study: Timely Fashions Boost Profits for Zara) Firms earn economic profit by offering a
differentiated product. How does Zara differentiate its clothing?
By differentiating in production, gathering of sales data, and distribution, Zara can develop and deliver
a new item in two weeks compared to the industry average of six months.
Another random document with
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The Project Gutenberg eBook of A. L. O. E.'s picture story book
This ebook is for the use of anyone anywhere in the United States and most other parts of the world at
no cost and with almost no restrictions whatsoever. You may copy it, give it away or re-use it under the
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located before using this eBook.
Title: A. L. O. E.'s picture story book
Author: A. L. O. E.
Release date: November 13, 2023 [eBook #72109]
Language: English
Original publication: United Kingdom: T. Nelson and Sons, 1871
*** START OF THE PROJECT GUTENBERG EBOOK A. L. O. E.'S PICTURE STORY BOOK ***
Transcriber's note: Unusual and inconsistent spelling is as printed.
A. L. O. E.'s
PICTURE STORY BOOK.

LONDON:
T. NELSON AND SONS, PATERNOSTER ROW;
EDINBURGH; AND NEW YORK.
1871.
PREFACE.
A PORTION of the Stories in this Volume have appeared in the "Children's Paper," but
the greater number have never before been published. A. L. O. E., in sending forth this
little Work, feels something like a labourer who, when wearied by heavier work, finds that
he can yet tell stories on a winter's evening to the little ones gathering around his chair, or
seated on his knee. There is something refreshing to the spirit in the atmosphere of
childhood, and an Authoress may feel its influence even in writing for children. Especially is
this the case if her aim, in entering nursery or playroom, be to try to make their young
inmates more happy, because more loving and good.
A. L. O. E.
CONTENTS.
I. "THE HYMN MY MOTHER TAUGHT ME"
II. THE BEAR

III. THE TIGER-CUB
IV. NOT ONE TOO MANY
V. THE IRON RING
VI. THE ILL WIND
VII. THE TWO PETS
VIII. THE BOY AND THE BIRD'S NEST
IX. THE ENGLISH GIRL AND HER AYAH
X. I'LL NOT LET YOU GO
PART I.
PART II.
PART III.
XI. THE WHITE DOVE
A. L. O. E.'s PICTURE STORY BOOK.

I. "THE HYMN MY MOTHER TAUGHT ME."
"GET away with ye, will ye, Ben Madden! I don't want you a-sneaking about my stall to see
what you can be laying your fingers on!" exclaimed Betty Wiggins, the cross old dame who
sold biscuits and cakes at the corner of High Street.
The poor orphan boy thus rudely addressed slunk back a pace or two from the tempting
stall. His young heart was burning with anger, and indignant tears rose into his eyes.
"I never in my life took what did not belong to me," muttered Ben; "my poor mother
taught me something better than that."
Betty Wiggins might have given a kind word to the lonely child, if she had given no more.
Ben Madden had lately lost his mother, a poor industrious widow, who had worked as long
as her fingers could work to support herself and her orphan boy. Alice Madden had died in
peace and faith, commending her child to the care of Him who hath said, "I will never
leave thee, nor forsake thee."
Poor Ben seemed to have a hard life struggle before him. He had no relative living but a
sailor uncle, who might, for aught that he knew, be now on the other side of the world.
There was none to care whether the orphan slept under a roof or an archway, whether he
fed or whether he starved. Betty, who had known his mother for years, might have spared
him one of those biscuits, and never have missed it amongst so many; so thought Ben,
who, since rising at daybreak, had not tasted a morsel of food.
As Ben stood leaning against an area railing, looking wistfully at the piles of cakes and
gingerbread nuts, a light cart, in which was seated a reckless young driver urging on an
excited horse, was whisked round the corner of High Street with such careless speed, that
it knocked over the stall and threw its contents on the pavement. What a scatter was there
of tartlets and cakes, bits of toffee and rock, biscuits, bull's eyes, almonds and buns, and
sticks of bright barley sugar! Had the stall-woman been any other than cross Betty
Wiggins, Ben would have run forward to help her to pick up her goods, which were rolling
about in every direction. But a feeling of resentment filled the soul of the boy; he was not
sorry for Betty's disaster.
"She bade me keep off," thought the child, "and I will; she would not trust me to pick up
her biscuits."
Ben would not go to the cakes, but one of the cakes came to him. A beautiful pink one,
studded with almonds, and frosted with sugar, rolled close up to his feet. Betty did not
mark this, for with clenched hand and flashing eyes she was pouring a torrent of abuse
after the careless driver whose cart had done the mischief, which the youth would not stop
to repair. Ben saw the cake—the delicious pink cake—what a temptation to a half famished
boy! Forgetful of his own words so lately uttered, in a moment the child caught it up, and
hurried away down the street; leaving Betty to abuse the driver, set up the stall, and
recover such of her dainties as had not been smashed on the pavement.
Before Ben had walked many steps, he had eagerly swallowed the cake; having once
tasted its sweetness, he felt as if nothing could stop him from eating the whole. Ben had
committed his first theft, he had forgotten the words of his mother, he had broken the law
of his God. Let none of my readers deem his fault a small one, or think that little harm
could come from a hungry boy's eating a single cake that had rolled to his feet. Ben's
enjoyment was quickly over; what had pleased his taste had but whetted his hunger, and it
seemed as if with that stolen morsel evil had entered into the boy.
Every time that we yield to temptation, we have less power to resist it in future. Many
sinful thoughts came into the mind of Ben as he lounged through the streets. Never before
had he so envied the rich, those who could feast every day upon dainties. With a careless
eye, he gazed into shops filled with good things which he could not buy. With a repining,
discontented spirit, he thought of his own hard lot. Why had his mother been taken from
him? Why had he been left to sorrow and want?
Then, in this dangerous state of mind, Ben began to consider how he could find means of
supplying his need. He did not think now of prayer; he did not think of asking his heavenly
Father to open some course before him by which he might honestly earn his bread. Ben
remembered how that sharp lad, Dennis O'Wiley, had told him that he knew ways and
means by which a lad could push himself on in the world. When Ben had repeated these
words to his mother, she had warned him against Dennis O'Wiley; she had said that he
feared neither God nor man, and would end his days in a prison. Ben had resolved, in
obedience to his parent, never to keep company with the lad; but, since stealing that pink
sugared cake, Ben found his resolution beginning to waver. He could see no great harm in
Dennis, as good-natured a fellow as ever was born; why should he not ask a bit of advice
from a chap who seemed always to find out some way of getting whatever he wanted?
Alas, poor Ben! He had been like one standing at a spot where two roads branch off: the
strait one leading to life, the broad one leading to destruction—his first theft was like his
first step in the fatal downward road. But for a little incident which I am going to relate,
the widow's son might have gone from evil to evil, from sinful thoughts to wicked deeds,
till his heart had grown hard, and his conscience dead, and he had led a life of guilt and of
shame, to close in misery and ruin.
As Ben was sauntering down a street, half resolved to seek Dennis O'Wiley, his ear caught
the sound of music. It came from an open door, leading into an infant school. Ben, who
dearly loved music, drew near and listened to the childish voices singing a well-known
hymn. Very heavy grew the heart of the boy, and his eyes were dimmed with tears, for he
heard the familiar words—
"Oh, that will be joyful

When we meet to part no more!"
Ben's lips quivered as he murmured to himself, "That is the hymn my mother taught me."
What seeming trifles will sometimes change the whole current of our thoughts! The sound
of that music brought vividly before the mind of poor Ben his mother's face as she lay on
her sick-bed: the touch of her hand, her fond look of love, her dying words of advice to her
son. It was as if she had come back to earth to stop her poor boy on his downward way.
His thoughts were recalled to God and heaven, to that bright home to which he felt that
his mother had gone, and where he hoped one day to join her—the blessed mansions
prepared by the Saviour for those who love and obey Him.
"Holy children will be there

Who have sought the Lord by prayer."
Ben turned away with almost a bursting heart. Heaven is not for the unholy, the
disobedient, the covetous, for those who take what is not their own! If he went on in the
fatal course on which he had entered that day, he would never again meet his mother, he
would never be "joyful" in heaven! Was it too late to turn back? Might he not ask God's
forgiveness, and pray for grace to lead a new life?
"Yes," thought the penitent child, "I will never forget my mother's wishes, I will follow my
mother's ways! With the very first money that I get, I will pay for the cake that I stole."
The strength of Ben's resolution was very soon put to the test. Scarcely had he made this
silent promise, when a carriage with a lady inside it was driven up to the school, and as
there was no footman with it, and the coachman could not leave the box, Ben ran forward
to open the door, and guard the lady's dress from the wheel. The lady smiled kindly on the
child, and taking a penny from her bag, dropped it into his hand.
Here was a penny honestly earned; a penny that would buy two stale rolls to satisfy the
hunger of Ben. Could it be wrong thus to spend it! Had he received it one hour before, Ben
would have run to a baker's shop, and laid out the money in bread; but conscience now
whispered to Ben that he had a debt to discharge, that that penny by right was Betty's,
and that his first duty was to pay for the cake which he had wrongfully taken.
"But I'm so hungry!" thought Ben, as he looked on the copper in his hand. "I will buy what
I need with this penny, and pay my debt with the next. But yet—" Thus went on the
struggle between self-will and conscience—"my mother taught me that to put off doing
what is right, is actually doing what is wrong. Often have I heard her say, 'When
conscience points out a difficult duty, don't wait in hopes that it will grow easy.'"
Ben turned in the direction of High Street, but before two steps on his way, pride offered
another temptation. "I can't bear to go up to Betty," thought Ben, "and tell her that I stole
her cake!" He stopped short, as the thought crossed his mind. "But can't I walk by her
stall, and just drop the penny on it as I pass, and say nothing to bring myself shame!"
A little reflection showed Ben that this could not be done. "She'd be crying out again, 'Get
away with ye;' she'd think I was fingering her cakes. Besides—" here conscience spoke
strongly once more—"does not the Bible tell us to confess our faults one to another? Is it
not the brave, the right way to go straight to the persons we've wronged and tell them
we're sorry for the past?"
It was a hard struggle for Ben, and when with a short, silent prayer for help, he walked on
again towards High Street, the child was more of a true hero than many who have earned
medals and fame. He was conquering Satan, he was conquering self, he was bearing
hunger and daring shame, that he might be honest and truthful.
Ben soon came in sight of Betty and her stall; it seemed to the boy that the wrinkled old
face looked more cross and peevish than ever. A sailor was standing beside the woman,
buying some gingerbread nuts.
"Now or never," thought Ben, who did not trust himself to delay, now that his mind was
made up. His face flushed to the roots of his hair with the effort that he was making, the
child walked straight up to the stall, laid his penny upon it, and said, "I took one of your
cakes to-day—I'm sorry—there is the money for it!"
"Well, Ben Madden!" exclaimed the old woman in surprise, "you're an honester lad than I
took you for—you mind what your mother taught you."
"Ben Madden!" cried the sailor, looking hard at the orphan boy. "That's a name I know
well. Can this be the son of the sister whom I've not set eyes on these seven long years!"
"His mother was the widow of big Ben the glazier," said Betty, "who died by a fall from a
window."
"The very same!" cried the sailor, grasping the hand of his nephew, and giving it a hearty
shake. "What a lucky chance that we met! And where's your mother, my boy?"
Tears gushed into poor Ben's eyes, as in a low voice, he answered, "In heaven."
The seaman's rough hearty manner instantly changed; he turned away his head, and was
silent for several minutes, as if struggling with feelings to which he was ashamed to give
way. Then, laying his brown hand on the shoulder of his nephew, he said in a kindly tone,
"So you've neither father nor mother, poor child; you're all alone in the world! I'll be a
father to you, for the sake of poor dear Alice."
Fervently did poor little Ben thank God who had thus provided for him a friend when he
most needed one, and least expected to find one! With wonder, the orphan silently traced
the steps by which his heavenly Father had led him. What a mercy it was that he had
passed near the school,—that he had heard the hymn,—that he had resolved to be honest,
—and that his resolution had brought him to the cake-woman's stall when the sailor was
standing beside it! Had Ben delayed but for ten minutes, he would never have met his
uncle! Yes, in future life, the orphan frequently owned that all his earthly comforts had
sprung from the decision which he had been strengthened to make when, at the turning-
point of his course, he had stood at the door of the infant school, listening with a penitent
heart to the hymn which his mother had taught him!
II. THE BEAR.
"HE is just like a bear!" That is a very common expression when we talk of some ill-
tempered man or boy, who takes a pleasure in saying rude things, and who seems bent
upon making every one near him as uncomfortable as he can.
But we may be unjust even to bears. Could you have gone to wintry Greenland, and seen
Mrs. Bruin amidst her family of little white cubs, each scarcely bigger than a rabbit, you
would have agreed that a bear can be a kind and tender mother, and provide for her four-
footed babies a snug and comfortable home.
You would, indeed, have had some difficulty in finding Bear Hall, or Bear Hole, as we rather
should call it. Perhaps in wandering over the dreary snow-covered plains of Greenland, you
might have come upon a little hole in the snow, edged with hoar-frost, without ever
guessing that the hole was formed by the warm breath of an Arctic bear, or that Mrs. Bruin
and her promising family were living in a burrow beneath you. *
* See "Homes without Hands."
How wonderfully does Instinct teach this rough, strange-looking creature to provide for her
cubs! The mother bear scrapes and burrows under the snow, till she has formed a small
but snug home, where she dwells with her baby-bears during the sharpest cold of an Arctic
winter. So wonderfully has Providence cared for the comfort even of wild beasts, that the
mother needs no food for three months! She is so fat when she settles down in her under-
snow home, that her own plumpness serves her instead of breakfast, dinner, and supper;
so that when at last she comes out to break her long fast, she is not starved, but has
merely grown thin. I need hardly remind my reader that the Arctic bear is provided by
Nature with a thick, warm, close-fitting coat of white fur; and the snow itself, strange as it
seems to say so, serves as a blanket to keep the piercing air from her narrow den.
Yes, Mrs. Bruin was a happy mother, though her cell was small to hold her and her
children, and the cold above was so terrible that water froze in the dwellings of men even
in a room with a fire. Mrs. Bruin found enough of amusement in licking her cubs, which
was her fashion of washing, combing, and dressing, and making them look like respectable
bears. She let them know that she loved them dearly in that kind of language which little
ones, whether they be babies or bear-cubs, so soon understand.
But when March came, Mrs. Bruin began to grow hungry, and think that it was full time to
scramble out of her under-snow den, and look out for some fish, or a fat young seal, to eat
for her breakfast. The weather was still most fearfully cold, and the red sun seemed to
have no power at all, save to light up an endless waste of snow, in which not a tree was to
be seen save here and there a stunted fir, half crusted over with ice.
Safe, however, and pretty warm in their shaggy furs, over the dreary wilds walked Mrs.
Bruin, and the young bears trotting at her heels. They went along for some time, when
they came to a round swelling in the snow; at least so a little hut appeared to the eyes of
a bear. Indeed, had our own eyes looked on that snow-covered hillock, we should scarcely
at first have guessed that it was a human dwelling.
Perhaps some scent of food came up from the chimney-hole, which made Mrs. Bruin think
about breakfast, for she went close up to the hut, then trotted around it—her rough white
nose in the air. She then uttered a low short growl, which made her cubs amble up to her
side.
Oh, with what terror the sound of that growl filled the heart of poor Anneetah, the
Esquimaux woman, who was with her little children crouching together for warmth in that
hut!
"Did you hear that noise?" exclaimed Aleekan, the eldest boy, stopping suddenly in the
midst of a tale which he had been telling.
"There's a bear outside!" cried all the younger children at once.
Anneetah rose, and hastily strengthened the fastenings of her rude door with a thick piece
of rope, while her children breathlessly listened to catch again the sound which had filled
them with fear.
"The bear is climbing up outside!" cried little Vraga, clinging in terror to her mother. "I can
hear the scraping of its claws!"
There was an anxious pause for several minutes, all listening too intently to break the
silence by even a word. Then, to the great alarm of the Esquimaux, the white head of an
Arctic bear could be plainly seen, looking down upon them from above. The animal had,
after clambering up to the top of the hut, enlarged the hole which had been left in the roof
to let out the smoke.
"We're lost!" exclaimed Aneekah.
"O mother, let us pray! Will not God help us?" cried one of the children. *
The prayer could have been but a very short one, but the presence of mind which the
mother showed may have been given as the instant answer to it. Aneekah caught up a
piece of moss, stuck it on a stick, set it on fire, and held the blazing mass as close as she
could to the nose of the bear.
* This incident of the intrusion of the bear, and the exclamation

of the child, has been given as a fact.
Now fire was a new thing to Mrs. Bruin, and so was smoke, and if the bear had frightened
the Esquimaux, the Esquimaux now frightened the bear. With a snort and a shake of her
shaggy fur, the animal drew back her head, and, to the surprise and delight of the
trembling family, they soon heard their unwelcome visitor scrambling down faster than she
had clambered up. Mrs. Bruin trotted off to seek her breakfast elsewhere; let us hope that
she and her cubs found a fine supply of fish frozen in a cleft in some iceberg floating away
in the sea. At any rate, they never again were seen near the Esquimaux home.
Do you wonder how the poor Esquimaux child had learned the value of prayer? Would any
one go to the dreary wilds of Greenland to carry the blessed gospel to the natives of that
desolate shore?
Yes, even to "Greenland's icy mountains" have missionaries gone from brighter, happier
lands. There are pastors now labouring amongst the poor Esquimaux, for they know that
the soul of each savage is precious. The light of the gospel is shining now in Esquimaux
homes, and, amidst all their hardships, sufferings, and dangers, Esquimaux have learned
to show pious trust when in peril, and thankfulness after deliverance. It is from the pen of
a missionary that we have learned the story which I have just related of the Esquimaux
woman and the white bear.
III. THE TIGER-CUB.
"REALLY, Captain Guise, you need trouble yourself no more in the matter; I am quite able
to take care of myself!" cried young Cornet Stanley, with a little impatience in his tone.
The speaker was a blue-eyed lad, whose fresh complexion showed that he had not been
long in the burning climate of India. Cornet Stanley had indeed but lately left an English
home, for he was little more than sixteen years of age. With very anxious feelings, and
many tears, had Mrs. Stanley parted with her rosy-checked Norman. "He is so very
young," as she said, "to meet all the trials and temptations of an officer's life in India!"
Mrs. Stanley's great comfort was that her Norman would have a tried and steady friend in
her cousin, Captain Guise, who would, she felt sure, act a father's part to her light-hearted
boy. Young Stanley was appointed to the same regiment as that of the captain; and almost
as soon as the cornet had landed in India, he proceeded up country to join it. The season
of the year was that which is in India called the cold weather, when many Europeans live in
tents, moving from place to place, that they may amuse themselves with hunting and
shooting.
Norman Stanley, who had never before chased anything larger than a rabbit, was delighted
to make one of a party with two of his brother officers, and enjoy with them for a while a
wild, free life in the jungle. There would have been no harm at all in this, had Norman's
new companions been sober and steady young men; but Dugsley and Danes were noted
as the two wildest officers in the regiment.
Captain Guise was also out in camp, and his tent was pitched not very far from that of his
young friend Norman. The captain took a warm interest in young Stanley, not only for the
sake of his parents, but also for his own; for the bright rosy face and frank manner of the
lad inclined all who met him to feel kindly towards him.
It was with no small regret that Captain Guise, on the very first evening when the officers
all dined together, saw that young face flushed not with health, but with wine, and that
frank manner become more boisterous than it had been earlier in the day. Not that
Norman Stanley could have been called drunk, but he had taken a little more wine than
was good for him to take; and his friend knew but too well in what such a beginning of life
in India was likely to end.
The captain was a good and sensible man, and he could not see his young relative led into
folly and sin without warning him of the danger into which he was heedlessly running.
Captain Guise, on the following day, therefore, visited Norman in his tent, and tried to put
him on his guard against too close friendship with Dugsley and Danes, and to show him
the peril of being drawn by little and little into intemperate habits.
Norman Stanley, who thought himself quite a man because he could wear a uniform and
give commands to gray-bearded soldiers, was a little hurt at any one's thinking of
troubling him with advice. Captain Guise had, however, spoken so kindly that the lad could
not take real offence at his words, but only tried to show his friend that his warning was
not at all needed.
"I shall never disgrace myself by becoming a drunkard, you may be certain of that," said
the youth; "no one despises a sot more than I do, and I shall never be one. As for taking
an extra glass of champagne after a long day's shooting, that is quite a different thing, and
nobody can object to it."
"But the extra glass, Norman, is often like the thin point of the wedge," said the captain;
"it is followed by another and another, till a ruinous habit may be formed."
"I tell you that I shall never get into habits of drinking," interrupted young Stanley. Then,
as he took up his gun to go out shooting, the cornet uttered the words with which this little
story commences.
Captain Guise did not feel satisfied. He saw that his young friend was relying on the
strength of his own resolutions, and in so doing was leaning on a reed. He could not,
however, say anything more just then, and Norman Stanley started a new subject to give a
turn to the conversation.
"By the by, Captain Guise, I've not shown you the prize which I captured yesterday. As
Dugsley and I were beating about in the jungle, what should we light upon but a tiger-cub
—a real little beauty, pretty and playful as a young kitten."
"What did you make of it?" asked the captain.
"Oh, I've tethered it to the tree yonder," said Norman, pointing to one not a hundred yards
distant. "By good luck, I had a dog's chain and collar which fitted the little creature exactly.
I mean to try if I can't rear it, and keep a tiger-cub as a pet."
"A tiger-cub is rather a dangerous pet, I should say," observed Captain Guise, with a smile.
"Oh, not a bit of it!" cried Norman lightly. "The little brute has no fangs to bite with, and if
it had, the chain is quite strong enough to—"
The sentence was never finished, for while the last word was yet on the smiling lips of the
youth, the sudden sound of a savage roar from a neighbouring thicket made him start,
turn pale, and grasp his gun more firmly. Forth from the shade of the bushes sprang a
large tigress. In a minute, with a few bounds, she had cleared the space between herself
and her cub! Snap went the chain, as the strong wild beast caught up her little one in her
mouth; and before either Norman or the captain (who had snatched up a second gun) had
time to take aim, the tigress was off again, bearing away her rescued cub to the jungle!
"That was a sight worth seeing!" exclaimed Captain Guise. "I never beheld a more splendid
creature in all my life!"
Norman, who was very young, and quite unaccustomed to having a tiger so near him with
no iron cage between them, looked as though he had not enjoyed the sight at all. "I should
not care to meet that splendid creature alone in the jungle," he observed. "Did you not
notice how the iron chain snapped like a thread at the jerk which she gave it?"
"Yes," replied Captain Guise, as he turned back into the tent; "what will hold in the cub, is
as a spider's web to the full-grown wild beast. You had, as I told you, a dangerous pet,
Norman Stanley. You might play for a while with the young creature, but claws will
lengthen and fangs will grow. And," the captain added more gravely, "this is like some
other things which are at first but a source of amusement, but which are too likely to
become at last a source of destruction."
Norman Stanley's cheek reddened, for he felt that it was not merely of a tiger's cub that
his friend was speaking. Evil habits, which at first seem so weak that we believe that we
can hold them in by a mere effort of will, grow fearfully strong by indulgence. Many a
wretched drunkard has begun by what he called merely a little harmless mirth, but has
found at last that he has been fostering something more dangerous still than a tiger's cub.
His good resolutions have snapped; he has been carried away by a terrible force with
which he has not had the strength to grapple; and so has proved the truth of the captain's
words, that what is at first but a source of amusement may be at last a source of
destruction.
IV. NOT ONE TOO MANY.
"NO, neighbour, you've not one too many," observed Bridget Macbride, as she stood in the
doorway of the cottage of Janet Maclean, knitting coarse gray socks as fast as her fingers
could go.
"It's easy enough for you to say so," replied Janet, who was engaged in ironing out a shirt,
and who seemed to be too busy even to look up as she spoke—"it's easy enough for you to
say so, Bridget Macbride. You've never had but three bairns [children] in your life, and
your husband, he gets good wages. You'd sing to a different tune, I take it, if you'd nine
bairns, as I ha'e, the oldest not twelve years old—nine to feed, to clothe, and to house,
and to toil and moil for, and your goodman getting but seven shillings a-week, though he's
after the sheep from morning till night!" Mrs. Maclean had been getting quite red in the
face as she spoke, but that might have been from stooping over her ironing work.
"Still, children are blessings,—at least, I always thought mine so," observed Bridget
Macbride.
"Blessings; yes, to be sure!" cried Janet. "I thought so too, till there were so many of them
that we had to pack in the cottage like herrings in a barrel."
Janet was now ironing out a sleeve, and required to go rather more gently on with her
work. "I'm sure nae folk welcomed little ones more than Tam and I did the four first wee
bairns, though many a broken night's rest we had wi' poor Jeanie,—and I shall never
forget the time when the measles was in our cottage, and every ane o' the four had it!
Yes," the mother went on, "four we could manage pretty well, with a wee bit o' pinching
and scraping; but then came twins; and then little Davie; and afore he could toddle alane,
twins again!" And Janet banged down her iron on its stand, as if two sets of twins were too
much for the patience of any parent to endure.
"You must have a struggle to keep them all," observed Bridget Macbride.
"Struggle! I should say so!" cried Janet, looking more flushed and angry than ever. "We
never could have got on at all, had I not taken in washing and ironing; and it's no such
easy matter, I can tell you, to wash and iron line things for the gentry with twin-babies a-
wanting you to look after them every hour in the twenty-four!"
It seemed as if the babies had heard themselves mentioned, for from the rude cradle by
the fire came a squall, first from one child, and then from both, and poor Janet was several
minutes before she could get either of them quiet again.
"You've a busy life of it indeed," observed Bridget, as soon as the weary mother was able
once more to take up her iron.
"'Deed you may say so," replied Janet sharply, plying her iron faster, as if to make up for
lost time. "And for all my working, and Tam's, we can scarce get enough of bread or
porridge to fill nine hungry mouths; and as for meat, we don't see it for weeks and weeks
—not so much as a slice of bacon! Then there's the schooling of the twa eldest bairns to be
paid for, as Tam and I won't ha'e them grow up like heathen savages; and we'll hae them
gae decent too, not in rags and barefooted, like beggars. And I should like to know—"
Janet was ironing fast, but talking faster—"I should like to know how shoon [shoes] and
sarks [shirts], and a plaidie for this ane, and a bonnet for anither, and breakfasts o'
bannocks, and porridge for supper, are a' to come out of that wash-tub?"
"And yet," observed Bridget Macbride, "hard as you have to work for your children, I don't
believe that you would willingly part with one of them, neighbour."
Even as she spoke, there was a distressful cry of "Mither! Mither!" as Janet's two eldest
children burst suddenly into the cottage, looking unhappy and frightened.
"What ails the bairns?" asked Janet anxiously, turning round at the cry.
"O mither, we've lost wee Davie; we can't find him nowhere in the wood, and we be afeard
as he may have fallen over the cliff."
"Davie! My bairn! My darling!" exclaimed poor Janet, forgetting in a moment all her toils
and troubles in one terrible fear. Down went the iron on the table, and without waiting to
put on bonnet or shawl, the fond mother rushed out of the cottage, to go and search for
her child. Bridget had spoken the truth; Janet might complain of the trouble brought by a
large family, but she could not bear to part with one out of her flock. If Davie had been the
only child of a rich mother, instead of the seventh child of a poor one, he could not have
been sought with more eager anxiety, more tender, self-forgetting love.
Followed by several of her children, but outstripping them all in her haste, Janet was soon
at the edge of the wood. "Davie! Davie! My bairn! My bairn!" resounded through the
forest. The mother's cry was answered by a distant whoop and halloo;—Janet knew the
voice of her husband, and her heart took courage from the sound. But her hope was
changed into delight, when she caught a glimpse between the trees of the shepherd
coming towards her, with her little yellow-haired laddie Davie perched on his broad
shoulders, grasping with one hand his father's rough locks, and with the other a bannock,
which he was nibbling at as he rode.
"The Lord be praised!" cried poor Janet, and rushing forward she caught the child from her
husband, pressed Davie closely to her heart, and burst into a flood of grateful tears.
"You must look a bit better after your stray lamb, Janet," said Tam with a good-humoured
smile. "I was just crossing the wood when Trusty set up a barking which made me go out
o' my way just to see if he had found a rabbit, or started a black-cock. There was our wean
[child] sitting much at his ease, munching a bannock, as contented and happy as if he'd
been a duke eating venison out of a golden dish. But you mustna let the wee bairn wander
about by himself, for if he'd gaen over the cliff, we'd never hae heard the voice o' our
lammie again."
Very joyful and very thankful was Janet Maclean, as, with her boy in her arms, she
returned to her cottage. Bridget had remained there to take care of the twins during the
absence of their mother.
Mrs. Macbride received her neighbour with a smile, and the words, "Didna I say, Janet,
that ye'd not one too many, nor would willingly part wi' a single bairn out o' your nine?"
"The Lord forgi'e my thankless heart!" said poor Janet, and she fondly kissed her boy. "We
ne'er are grateful enough for our blessings until we are like to lose them."
Then putting the little child down on the brick floor, with fresh courage and industry the
mother returned to her ironing again.
May we not hope that all Janet's toil and hard work for her children had one day a rich
reward? May we not hope that not one out of the nine, when old enough and strong
enough to labour for her who had laboured so hard for them, but did his best to repay her
care and her love? How large is a parent's heart, that opens wide and wider to take in all
the children of her family, however numerous those children may be! Though each new
babe adds to poor parents' toils, and takes from their comforts, still the kind father and
the fond mother, as they look round their home circle of rosy faces, can not only say but
feel, "There is not one too many."
V. THE IRON RING.

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ECON Micro 2 2nd Edition McEachern

In this chapter, you will find:

2 Explain the concept of oligopoly

3 Describe models of oligopoly

4 Explain how game theory helps predict cartel behavior

5 Compare oligopoly and perfect competition

CHAPTER OUTLINE WITH POWERPOINT SCRIPT

USE POWERPOINT SLIDES 2-3 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 4-6 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 7-9 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 10-12 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 13-17 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 18-21 FOR THE FOLLOWING SECTION

• Differentiated Oligopolies: Sells products that differ across producers.

USE POWERPOINT SLIDE 22 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 23-25 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 26-27 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDES 28-37 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDE 38 FOR THE FOLLOWING SECTION

USE POWERPOINT SLIDE 39 FOR THE FOLLOWING SECTION

ANSWERS TO END-OF-BOOK QUESTIONS AND PROBLEMS

Output Price FC VC TC TR Profit/Loss

a. Complete the table.

a. Output Price FC VC TC TR Profit/Loss

b. The lowest loss is $30.

(a), (b), and (c)

a. Newly joined cartel members are less–developed countries.

Ford's Chevrolet's Ford’s Chevrolet’s

a. What price will Ford charge?

a. The payoff matrix is

Student A signs Student A does NOT sign

Student B signs A gets an F; B gets an F A is expelled; B withdraws

Student B does NOT sign A withdraws; B is expelled A gets a C; B gets a C

a. A large number of sellers

a. Perfect competition and monopolistic competition

SUPPLEMENTAL CASES, EXERCISES, AND PROBLEMS

These cases are available to students online at www.cengagebrain.com.

Fast Forward to Creative Destruction

Timely Fashions Boost Profit for Zara

Additional Questions and Problems

ANSWERS TO ONLINE CASE STUDIES

Title: A. L. O. E.'s picture story book

Release date: November 13, 2023 [eBook #72109]

Original publication: United Kingdom: T. Nelson and Sons, 1871

PICTURE STORY BOOK.

EDINBURGH; AND NEW YORK.

I. "THE HYMN MY MOTHER TAUGHT ME"

II. THE BEAR

IV. NOT ONE TOO MANY

V. THE IRON RING

VI. THE ILL WIND

VII. THE TWO PETS

VIII. THE BOY AND THE BIRD'S NEST

IX. THE ENGLISH GIRL AND HER AYAH

X. I'LL NOT LET YOU GO

XI. THE WHITE DOVE

A. L. O. E.'s PICTURE STORY BOOK.

"Oh, that will be joyful

"Holy children will be there

* See "Homes without Hands."

"There's a bear outside!" cried all the younger children at once.

"We're lost!" exclaimed Aneekah.