《管理经济学》第七章
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▪ Examples of Competitive Markets
➢ Agricultural commodities. ➢ Prominent markets for intermediate goods
and services. ➢ Unskilled labor market.
.Hale Waihona Puke Baidu
Profit Maximization in Competitive Markets
Factors that Shape the Competitive Environment
▪ Product Differentiation
➢ R&D, innovation, and advertising are important in many markets.
▪ Production Methods
▪ Buyer Power
➢ Powerful buyers can limit seller power.
.
Competitive Market Characteristics
▪ Basic Features
➢ Many buyers and sellers. ➢ Product homogeneity. ➢ Free entry and exit. ➢ Perfect information.
▪ Vital Role of Potential Entrants
➢ Competition comes from actual and potential competitors.
➢ Potential entrants often affect price/output decisions.
.
▪ Role of Marginal Analysis
➢ Set Mπ = MR – MC = 0 to maximize profits. ➢ MR=MC when profits are maximized.
.
Marginal Cost and Firm Supply
▪ Short-run Firm Supply
Competitive Markets
Chapter 7
.
Chapter 7 OVERVIEW
▪ Competitive Environment ▪ Factors That Shape the Competitive
Environment ▪ Competitive Market Characteristics ▪ Profit Maximization in Competitive Markets ▪ Marginal Cost and Firm Supply ▪ Competitive Market Supply Curve ▪ Competitive Market Equilibrium
➢ Competitive market price (P) is shown as a horizontal line because P=MR.
➢ Firm’s marginal-cost curve shows the amount of output the firm would be willing to supply at any market price.
▪ Profit Maximization Imperative
➢ Normal profit is return necessary to attract and maintain capital investment.
➢ Efficient firms can earn normal profit. ➢ Inefficient firms suffer losses.
➢ Economies of scale can preclude small-firm size.
▪ Entry and Exit Conditions
➢ Barriers to entry and exit can shelter incumbents from potential entrants.
.
Chapter 7 KEY CONCEPTS
▪ market structure ▪ market ▪ potential entrant ▪ product differentiation ▪ competitive markets ▪ barrier to entry ▪ barrier to mobility ▪ barrier to exit perfect
➢ Marginal cost curve is the short-run supply curve so long as P > AVC .
.
.
Long-run Firm Supply
➢ Marginal cost curve is the long-run supply curve so long as P > ATC.
supply curve.
.
Competitive Environment
▪ What is Market Structure?
➢ Market structure is the competitive environment. ➢ Number of buyers and sellers. ➢ Potential entrants. ➢ Barriers to entry and exit, etc.
➢ In long run, firm must cover all necessary costs of production and earn a normal profit.
.
Competitive Market Supply Curve
competition ▪ price takers
▪ normal profit ▪ economic profit ▪ economic losses ▪ marginal analysis ▪ competitive firm short-run
supply curve ▪ competitive firm long-run
➢ Agricultural commodities. ➢ Prominent markets for intermediate goods
and services. ➢ Unskilled labor market.
.Hale Waihona Puke Baidu
Profit Maximization in Competitive Markets
Factors that Shape the Competitive Environment
▪ Product Differentiation
➢ R&D, innovation, and advertising are important in many markets.
▪ Production Methods
▪ Buyer Power
➢ Powerful buyers can limit seller power.
.
Competitive Market Characteristics
▪ Basic Features
➢ Many buyers and sellers. ➢ Product homogeneity. ➢ Free entry and exit. ➢ Perfect information.
▪ Vital Role of Potential Entrants
➢ Competition comes from actual and potential competitors.
➢ Potential entrants often affect price/output decisions.
.
▪ Role of Marginal Analysis
➢ Set Mπ = MR – MC = 0 to maximize profits. ➢ MR=MC when profits are maximized.
.
Marginal Cost and Firm Supply
▪ Short-run Firm Supply
Competitive Markets
Chapter 7
.
Chapter 7 OVERVIEW
▪ Competitive Environment ▪ Factors That Shape the Competitive
Environment ▪ Competitive Market Characteristics ▪ Profit Maximization in Competitive Markets ▪ Marginal Cost and Firm Supply ▪ Competitive Market Supply Curve ▪ Competitive Market Equilibrium
➢ Competitive market price (P) is shown as a horizontal line because P=MR.
➢ Firm’s marginal-cost curve shows the amount of output the firm would be willing to supply at any market price.
▪ Profit Maximization Imperative
➢ Normal profit is return necessary to attract and maintain capital investment.
➢ Efficient firms can earn normal profit. ➢ Inefficient firms suffer losses.
➢ Economies of scale can preclude small-firm size.
▪ Entry and Exit Conditions
➢ Barriers to entry and exit can shelter incumbents from potential entrants.
.
Chapter 7 KEY CONCEPTS
▪ market structure ▪ market ▪ potential entrant ▪ product differentiation ▪ competitive markets ▪ barrier to entry ▪ barrier to mobility ▪ barrier to exit perfect
➢ Marginal cost curve is the short-run supply curve so long as P > AVC .
.
.
Long-run Firm Supply
➢ Marginal cost curve is the long-run supply curve so long as P > ATC.
supply curve.
.
Competitive Environment
▪ What is Market Structure?
➢ Market structure is the competitive environment. ➢ Number of buyers and sellers. ➢ Potential entrants. ➢ Barriers to entry and exit, etc.
➢ In long run, firm must cover all necessary costs of production and earn a normal profit.
.
Competitive Market Supply Curve
competition ▪ price takers
▪ normal profit ▪ economic profit ▪ economic losses ▪ marginal analysis ▪ competitive firm short-run
supply curve ▪ competitive firm long-run