AP微观经济学4.ppt

AP微观经济学4.ppt

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8.MonopolyMonopolypAmonopolyischaracterizedby:

nasinglesellerofawell-definedproductforwhichtherearenogoodsubstitutesnhighbarrierstotheentryofotherfirmsintothemarketfortheproductpTypesofbarriersnLegalbarrierstoentrycreatelegalmonopoly.Alegalmonopolyisamarketinwhichcompetitionandentryarerestrictedbythegrantingofapublicfranchise,governmentlicense,patentorcopyright.nExample:

radioandtelevisionstationnNaturalbarrierstoentrycreatenaturalmonopoly,whichisanindustryinwhichonefirmcansupplytheentiremarketatalowerpricethantwoormorefirmscan.（Economiesofscale）nExample:

electricutilityCharacteristicspNumbersofsellers:

onesellerpAvailabilityofsubstitutes:

nopDegreeofelasticity:

generallyinelasticpPricingpolicy:

price-makerpBarrierstoentry/exit:

highpEconomicprofits:

yespPMC,PMRFirmandmarketPQATCMCQ*P*1.MR=MC2.FindthepointonD3.DecideP*andQ*ProfitDMRDead-weightlossPQACandMCQmPmDWL:

resourcescouldhavebeenutilizedtoproducegoodsandareinsteadtotallywasted.ProfitDMRConsumersurplusDWLPerfectCompetitionMonopolyPriceLowerHigherOutputHigherLowerPcQcPriceDiscrimination:

before80PriceQuantityDemandATC70100Profit=$2400pPricediscriminationisthepracticeofchargingdifferentconsumersdifferentpricesforthesameproductorservice.PriceQuantityDemandATC7050110$200090110190$1200Profit=$3200PriceDiscrimination:

afterConditions:

1.Consumershavedifferentpriceelasticity;2.Higherpriceforlowerelasticityconsumers;3.NochancefortheresaleoftheproductPriceDiscriminationpForpricediscriminationtoworkthesellermust:

nDownwardslopingdemandcurve（pricesearcher）nAtleasttwoidentifiablegroupsofcustomerswithdifferentpriceelasticitiesofdemandfortheproductnPreventthecustomerspayingthelowerpricefromresellingtheproducttothecustomerspayingthehigherprice（noarbitrage）pPricediscriminationreducesthisinefficiencybyincreasingoutputtowardthequantitywheremarginalbenefitequalsmarginalcost,andthedeadweightlossissmaller.pExtremeCase:

Ifitwerepossibleforthemonopolisttochargeeachconsumerthemaximumtheyarewillingtopayforeachunit,wherewouldbenodeadweightloss,sinceamonopolistwouldproducethesamequantityasunderperfectcompetition.Withperfectpricediscriminationtheconsumersurpluswouldallbecapturedbythemonopolist.NaturalMonopolypWhentheaveragecostofproductionforasinglefirmisfallingthroughouttherelevantrangeofconsumerdemand,wesaythattheindustryisanaturalmonopoly.nLargeeconomiesofscaleinanindustrypresentsignificantbarrierstoentry.GovernmentRegulationpRegulatorsoftenattempttoincreasecompetitionandefficiencythrougheffortstoreduceartificialbarrierstotrade,suchaslicensingrequirement,quotas,andtariffs.pGovernmentregulationnAveragecostpricingisthemorecommonformofregulationatthepointwhereATC=D.Thiswill:

pIncreaseoutputanddecreaseprice.pIncreasesocialwelfare（allocativeefficiency）.pEnsurethemonopolistanormalprofit（butnoeconomicprofit）sinceprice=ATC.nMarginalcostpricingwhichisalsoreferredtousefficientregulation,forcesthemonopolisttoreducepricetothepointwhereMC=D.thiswill:

pIncreaseoutputandreduceprice.pCausesthemonopolisttoincuralosssincepriceisbelowATC.pSuchasolutionrequiresagovernmentsubsidyinordertoprovidepthefirmwithanormalprofit.nAnotherwayof“regulating”amonopolyisforthegovernmenttosellthemonopolyrighttothehighestbidder.LossCUnregulatedandregulatedmonopolyPQATCMCQAPAProfitAMRDPBPCQBQCUnregulatedandregulatedmonopolyTypePriceQuantityCommentNaturalmonopolyCertainindustriescouldbestoperateasmonopoliessincecompetitionwouldpreventthebenefitsofeconomiesofscale.UnregulatedmonopolyPAQAEcoprofit0ProfitismaximizedRegulated:

priceatfairrateofreturnPBQBP=ATC=DEcoprofit=0MoreefficientRegulated:

priceatsociallyoptimalpricePCQCP=MC=DSubsidyneededtocutlossMostefficientInefficiencyofmonopolyHigherpriceandloweroutputMaximizeprofitsDead-weightlossInefficiencytothesocietyConcentrationMeasurespConcentrationmeasuresnLernerIndex:

（P-MC）/P.Thegreatertheindex,thegreaterthemarketpowernTheHerfindahl-HirschmanIndex（HHI）:

thesumofthesquaresofthemarketsharesofthelargestfirmsinthemarket.plimitation:

bothofoursimpleconcentrationmeasuresisthatbarrierstoentryarenotconsideredineithercase.Evenafirmwithhighmarketsharemaynothavemuchpricingpowerifbarrierstoentryarelowandthereispotentialcompetition.1000180010000competitivemoderatelycompetitiveNotcompetitivemonopoly9.Monopolisticcompetition15CharacteristicspNumbersofsellers:

oligopoly/monopoly,minATC,PMC,PMRpThemostcommonmarketstructureintheUSWaystocompetepSincesubstitutesarefullyavailableandaweakentrybarrier,amonopolisticfirmmustdisti