Remove Economists Earn Brownie Points
This week the Remove economics pupils have been cooking up a storm (cooking up Brownies actually!) in order to illustrate the effects of competitive markets.
The 40 pupils were split into 8 equally sized companies and given the task of selling the same product – chocolate brownies. Each team was given 50 MYR as ‘start-up capital’ and they could sell their wares on Friday morning only. Each company was trying to beat each other in terms of profit and sales and they were allowed to advertise via posters around the College and in the Senior School Assembly.
Perfect competition theory states that in a market where there are many companies selling the same product, consumers get a good deal with low prices, high quality products and innovation tends to thrive.
It was really interesting to see the different approaches taken by the pupils – some chose to keep things simple and prices very low, while others added quality to their brownies by adding toppings such as strawberries and ice cream. Economics beak and University Guidance Counsellor, Mr Hardee said, ‘I tried one of the brownies and clearly they have been forced to up their game, given the competition. It was delicious’.
Mr Hobby, Housemaster of Thompson and fellow economics beak, said ‘the simulation was excellent and really illustrated the key economic concepts’. Sayuj Sanjay, a Lower 6th Form IB economist enjoyed watching the younger years compete in the competition, but was keen to point out a slight anomaly with the experiment. He described the market for brownies as closer to ‘monopolistic competition’ rather than perfect competition, as the brownies produced were ‘slightly differentiated’ and ‘abnormal profits were made’. Economists use perfect competition as a theoretical model but it is rarely seen in practice in its purest form.
Nonetheless, the simulation was a huge success and the profits will be donated to the College’s outreach charity fund.