管理经济学第一章市场

(a) Industry
(b) Firm
Long-run equilibrium of the firm under perfect competition
£
(SR)MC (SR)AC
LRAC
DL AR = MR
LRAC = (SR)AC = (SR)MC = MR = AR
O
Q
Perfect Competition
• Assumptions
– firms are price takers
– freedom of entry
– identical products
– perfect knowledge
• Short-run equilibrium of the firm
– price, output and profit
• The four market structures
– perfect competition – monopoly – monopolistic competition – oligopoly
• Structure conduct performance
2/80
Perfect Competition
Chaptຫໍສະໝຸດ Baidur 12 Market Structures
1/80
The Degree of Competition
• Classifying markets
– number of firms – freedom of entry to industry – nature of product – nature of demand curve
• Advantages of monopoly
– economies of scale – profits can be used for investment
27/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate – X-inefficiency
D1
D3 O Q (millions) D2 O
Q (thousands)
(a) Industry
(b) Firm
Perfect Competition
• Long-run equilibrium of the firm
– all supernormal profits competed away – LRAC = AC = MC = MR = AR
• The short-run supply curve of the firm
3/80
Short-run equilibrium of industry and firm under perfect competition
P
S
£
MC
AC
Pe
AR AC
D = AR = MR
D
O Q (millions) O Qe Q (thousands)
Equilibrium of industry under perfect competition and monopoly: with the same MC curve
£
MC Monopoly
P1
AR = D
MR
O
Q1
Q
Equilibrium of industry under perfect competition and monopoly: with the same MC curve
24/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate – X-inefficiency
• Advantages of monopoly
– economies of scale – profits can be used for investment – high profits encourage risk taking
28/80
Monopoly
• Contestable markets
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate – X-inefficiency
22/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate
23/80
7/80
Long-run equilibrium under perfect competition
Profits return Supernormal profits New firms enter to normal
P
S1 Se
£
LRAC P1
PL AR1 ARL D1 DL
D
O Q (millions) O QL Q (thousands)
• Long-run equilibrium of the firm
– all supernormal profits competed away – LRAC = AC = MC = MR = AR
• Incompatibility of economies of scale with perfect competition
• Advantages of monopoly
25/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate – X-inefficiency
10/80
Monopoly
• Defining monopoly • Barriers to entry
– economies of scale – product differentiation and brand loyalty – lower costs for an established firm – ownership/control of key factors – ownership/control over outlets – legal protection – mergers and takeovers – aggressive tactics – intimidation
11/80
Monopoly
• The monopolist’s demand curve
– downward sloping – MR below AR
• Equilibrium price and output
– Equilibrium output, where MC = MR
12/80
Profit maximising under monopoly
• Profit
– Measuring profit – Supernormal profit can persist in long run
18/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run
19/80
14/80
Profit maximising under monopoly
£
MC AC
AR
AC
AR MR
O
Qm
Q
Monopoly
• The monopolist’s demand curve
– downward sloping – MR below AR
• Equilibrium price and output
– Equilibrium output, where MC = MR – Equilibrium price, found from demand curve
• Profit
– Measuring profit
16/80
Profit maximising under monopoly
£
MC
Total profit
• Advantages of monopoly
– economies of scale
26/80
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run – lack of incentive to innovate – X-inefficiency
AC
AR
AC
AR MR
O
Qm
Q
Monopoly
• The monopolist’s demand curve
– downward sloping – MR below AR
• Equilibrium price and output
– Equilibrium output, where MC = MR – Equilibrium price, found from demand curve
£
MC ( = supply under
perfect competition)
P1
P2
Comparison with Perfect competition
AR = D
MR
O
Q1 Q2
Q
Monopoly
• Disadvantages of monopoly
– high prices / low output: short run – high prices / low output: long run
– price, output and profit
• The short-run supply curve of the firm
5/80
Deriving the short-run supply curve
P
P1 P2 P3
S
£
a b c
MC = S D1 = MR1 D2 = MR2
D3 = MR3
£
MC
MR
O
Qm
Q
Monopoly
• The monopolist’s demand curve
– downward sloping – MR below AR
• Equilibrium price and output
– Equilibrium output, where MC = MR – Equilibrium price, found from demand curve
29/80
Monopolistic Competition
• Assumptions of monopolistic competition • Equilibrium of the firm
– short run
30/80
Short-run equilibrium of the firm under monopolistic competition
– importance of potential competition – a perfectly contestable market – contestable markets and natural monopolies – importance of costless exit
• Contestable markets and the public interest
(a) Industry
(b) Firm
Perfect Competition
• Assumptions
– firms are price takers – freedom of entry – identical products – perfect knowledge
• Short-run equilibrium of the firm