You will want to consider the following as you prepare your response.

Review the situation presented and identify the "main question" and any "subquestions".

As you formulate your answer to the "question" raised in the case, be sure to use the concepts that we have been learning about in the first eight chapters.

Don't over think the answer, but explore the solution from as many angles as you think appropriate.

The case: Toothpaste is Toothpaste?

In October of 1991, I had the opportunity to travel to the "Soviet Union". At that time, the Soviet Union was in political and economic turmoil. The "command economy" was failing and the Soviet Union was reverting to individual entities. Food and consumer goods were in short supply. After fifty years of "command" decisions, individual and companies were trying to come to grips with the elementary aspects of the "market." After addressing a group of business executives, where I talked about the concept of "consumer choices", I was asked the following question by the director of a manufacturing company. He said, "Help me understand something. You have talked about products and choices. Tell me how many kinds of toothpaste are available in your country." I responded that there were many different brands of toothpaste. Some brands have special flavors, some have special additives and some come in a variety of sizes and shapes. Depending on the brand, the size, the additive etc., they are sold at different prices. The director said, in all seriousness, "Why? Toothpaste is toothpaste, you clean your teeth with it, you only need one choice." Hum... .good point. What would you have said to him if you were in the conversation? Why are there different brands, flavors etc? Wouldn't it be more efficient if there were just one choice and one price? Wouldn't that serve society better?

Answer the Directors question. At this point, you should have some good background material about the difference between a Market Economy and a Command Economy, and the characteristics of the Market Economy that will support your answer. What is it about the Market Economy that helps support a variety of products for something like toothpaste?