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A Fire Sale for an Incombustible Commodity: Entry and Exit in the Helium Market

Katherine Lacy (), Elliott Parker, Olga Shapoval and Todd Sørenson

Applied Economics Teaching Resources (AETR), 2020, vol. 2, issue 4

Abstract: In this paper, we present a case study based on National Public Radio’s Planet Money episode 933, titled “Find the Helium” to illustrate to microeconomics students a firm’s cost structure in a competitive industry and unintended consequences of government intervention. Specifically, this case study examines the consequences of the Helium Privatization Act of 1996, which ordered the U.S. government to begin selling off its stocks of helium by 2005. As a result, the government flooded the market with cheap helium, disrupting the helium industry and causing private companies to exit the market. Throughout this case study, students are presented with details of these government acts, descriptions of how these acts and decisions impacted the helium market, as well as figures to display firm and industry effects. The last section contains questions that can be used during class discussions of this case study. Available upon request are detailed teaching notes (with student learning objectives) and a set of multiple-choice questions that can be used on exams, quizzes, and homework assignments, and answers and metadata for all case study questions.

Keywords: Teaching/Communication/Extension/Profession (search for similar items in EconPapers)
Date: 2020
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DOI: 10.22004/ag.econ.307147

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