经济学原理cha2.ppt

15 Monopoly Whileacompetitivefirmisapricetaker amonopolyfirmisapricemaker Afirmisconsideredamonopolyif itisthesolesellerofitsproduct itsproductdoesnothaveclosesubstitutes WHYMONOPOLIESARISE Thefundamentalcauseofmonopolyisbarrierstoentry WHYMONOPOLIESARISE Barrierstoentryhavethreesources Ownershipofakeyresource Thegovernmentgivesasinglefirmtheexclusiverighttoproducesomegood Costsofproductionmakeasingleproducermoreefficientthanalargenumberofproducers MonopolyResources Althoughexclusiveownershipofakeyresourceisapotentialsourceofmonopoly inpracticemonopoliesrarelyariseforthisreason Government CreatedMonopolies Governmentsmayrestrictentrybygivingasinglefirmtheexclusiverighttosellaparticulargoodincertainmarkets Government CreatedMonopolies Patentandcopyrightlawsaretwoimportantexamplesofhowgovernmentcreatesamonopolytoservethepublicinterest NaturalMonopolies Anindustryisanaturalmonopolywhenasinglefirmcansupplyagoodorservicetoanentiremarketatasmallercostthancouldtwoormorefirms NaturalMonopolies Anaturalmonopolyariseswhenthereareeconomiesofscaleovertherelevantrangeofoutput Figure1EconomiesofScaleasaCauseofMonopoly Copyright 2004South Western QuantityofOutput 0 Cost HOWMONOPOLIESMAKEPRODUCTIONANDPRICINGDECISIONS MonopolyversusCompetitionMonopolyIsthesoleproducerFacesadownward slopingdemandcurveIsapricemakerReducespricetoincreasesalesCompetitiveFirmIsoneofmanyproducersFacesahorizontaldemandcurveIsapricetakerSellsasmuchoraslittleatsameprice Figure2DemandCurvesforCompetitiveandMonopolyFirms Copyright 2004South Western QuantityofOutput a ACompetitiveFirm sDemandCurve b AMonopolist sDemandCurve 0 Price QuantityofOutput 0 Price AMonopoly sRevenue TotalRevenueP Q TRAverageRevenueTR Q AR PMarginalRevenueDTR DQ MR Table1AMonopoly sTotal Average andMarginalRevenue Copyright 2004South Western AMonopoly sRevenue AMonopoly sMarginalRevenueAmonopolist smarginalrevenueisalwayslessthanthepriceofitsgood Thedemandcurveisdownwardsloping Whenamonopolydropsthepricetosellonemoreunit therevenuereceivedfrompreviouslysoldunitsalsodecreases AMonopoly sRevenue AMonopoly sMarginalRevenueWhenamonopolyincreasestheamountitsells ithastwoeffectsontotalrevenue P Q Theoutputeffect moreoutputissold soQishigher Thepriceeffect pricefalls soPislower Figure3DemandandMarginal RevenueCurvesforaMonopoly Copyright 2004South Western QuantityofWater Price 11 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 1 2 3 4 5 6 7 8 ProfitMaximization Amonopolymaximizesprofitbyproducingthequantityatwhichmarginalrevenueequalsmarginalcost Itthenusesthedemandcurvetofindthepricethatwillinduceconsumerstobuythatquantity Figure4ProfitMaximizationforaMonopoly Copyright 2004South Western Quantity Q 0 Costsand Revenue ProfitMaximization ComparingMonopolyandCompetitionForacompetitivefirm priceequalsmarginalcost P MR MCForamonopolyfirm priceexceedsmarginalcost P MR MC AMonopoly sProfit Profitequalstotalrevenueminustotalcosts Profit TR TCProfit TR Q TC Q QProfit P ATC Q Figure5TheMonopolist sProfit Copyright 2004South Western Quantity 0 Costsand Revenue AMonopolist sProfit Themonopolistwillreceiveeconomicprofitsaslongaspriceisgreaterthanaveragetotalcost Figure6TheMarketforDrugs Copyright 2004South Western Quantity 0 Costsand Revenue ComparingMonopolytoPerfectCompetition Amonopolymarketcanbeexpectedtohaveahigherpriceandloweroutputthananotherwisesimilarperfectlycompetitivemarket ComparingMonopolyandPerfectCompetition 100 000 E 10 D S 1 000 ATC MC d 10 Fig 5cComparingMonopolyandPerfectCompetition 100 000 QuantityofOutput PriceperUnit E 10 D c Monopoly S MC 60 000 MR 15 F Figure4ComparingMonopolyandPerfectCompetition ComparingMonopolytoPerfectCompetition ChangeoverfromperfectcompetitiontomonopolybenefitsownersofmonopolyandharmsconsumersoftheproductImportantprovisoconcerningthisresultIncomparingmonopolyandperfectcompetition priceishigherandoutputislowerundermonopolyifallelseisequal ComparingMonopolytoPerfectCompetition GeneralconclusionMonopolizationofacompetitiveindustryleadstotwoopposingeffectsForanygiventechnologyofproduction monopolizationleadstohigherpricesandloweroutputChangesintechnologyofproductionmadepossibleundermonopolymayleadtolowerpricesandhigheroutputUltimateeffectonpriceandquantitydependsonrelativestrengthsoftwoeffects MonopoliesOftenEarnZeroEconomicProfit 1 Governmentregulation2 Rent seekingactivity MonopoliesOftenEarnZeroEconomicProfit Rent SeekingActivityAnycostlyactionafirmundertakestoestablishormaintainitsmonopolystatus WhyMonopoliesOftenEarnZeroEconomicProfit Incountrieswithcorruptbureaucracies rent seekingactivityincludesbribestogovernmentofficialsInlesscorruptgovernments itincludestimeandmoneyspentlobbyinglegislatorsandpublicforfavorablepolicesRent seekingactivitythathelpsestablishormaintainafirm smonopolypositionispartoffirm scostsAsaresult rent seekingactivitycanreduceeconomicprofitofamonopolyMayevenreduceittozero THEWELFARECOSTOFMONOPOLY Incontrasttoacompetitivefirm themonopolychargesapriceabovethemarginalcost Fromthestandpointofconsumers thishighpricemakesmonopolyundesirable However fromthestandpointoftheownersofthefirm thehighpricemakesmonopolyverydesirable Figure7TheEfficientLevelofOutput Copyright 2004South Western Quantity 0 Price TheDeadweightLoss Becauseamonopolysetsitspriceabovemarginalcost itplacesawedgebetweentheconsumer swillingnesstopayandtheproducer scost Thiswedgecausesthequantitysoldtofallshortofthesocialoptimum Figure8TheInefficiencyofMonopoly Copyright 2004South Western Quantity 0 Price TheDeadweightLoss TheInefficiencyofMonopolyThemonopolistproduceslessthanthesociallyefficientquantityofoutput TheDeadweightLoss Thedeadweightlosscausedbyamonopolyissimilartothedeadweightlosscausedbyatax Thedifferencebetweenthetwocasesisthatthegovernmentgetstherevenuefromatax whereasaprivatefirmgetsthemonopolyprofit PUBLICPOLICYTOWARDMONOPOLIES Governmentrespondstotheproblemofmonopolyinoneoffourways Makingmonopolizedindustriesmorecompetitive Regulatingthebehaviorofmonopolies Turningsomeprivatemonopoliesintopublicenterprises Doingnothingatall IncreasingCompetitionwithAntitrustLaws Antitrustlawsareacollectionofstatutesaimedatcurbingmonopolypower Antitrustlawsgivegovernmentvariouswaystopromotecompetition Theyallowgovernmenttopreventmergers Theyallowgovernmenttobreakupcompanies Theypreventcompaniesfromperformingactivitiesthatmakemarketslesscompetitive IncreasingCompetitionwithAntitrustLaws TwoImportantAntitrustLawsShermanAntitrustAct 1890 Reducedthemarketpowerofthelargeandpowerful trusts ofthattimeperiod ClaytonAct 1914 Strengthenedthegovernment spowersandauthorizedprivatelawsuits Regulation Governmentmayregulatethepricesthatthemonopolycharges Theallocationofresourceswillbeefficientifpriceissettoequalmarginalcost Figure9Marginal CostPricingforaNaturalMonopoly Copyright 2004South Western Quantity 0 Price Regulation Inpractice regulatorswillallowmonopoliststokeepsomeofthebenefitsfromlowercostsintheformofhigherprofit apracticethatrequiressomedeparturefrommarginal costpricing PublicOwnership Ratherthanregulatinganaturalmonopolythatisrunbyaprivatefirm thegovernmentcanrunthemonopolyitself e g intheUnitedStates thegovernmentrunsthePostalService DoingNothing Governmentcandonothingatallifthemarketfailureisdeemedsmallcomparedtotheimperfectionsofpublicpolicies PRICEDISCRIMINATION Pricediscriminationisthebusinesspracticeofsellingthesamegoodatdifferentpricestodifferentcustomers eventhoughthecostsforproducingforthetwocustomersarethesame PRICEDISCRIMINATION Pricediscriminationisnotpossiblewhenagoodissoldinacompetitivemarketsincetherearemanyfirmsallsellingatthemarketprice Inordertopricediscriminate thefirmmusthavesomemarketpower PerfectPriceDiscriminationPerfectpricediscriminationreferstothesituationwhenthemonopolistknowsexactlythewillingnesstopayofeachcustomerandcanchargeeachcustomeradifferentprice PRICEDISCRIMINATION Twoimportanteffectsofpricediscrimination Itcanincreasethemonopolist sprofits Itcanreducedeadweightloss Figure10WelfarewithandwithoutPriceDiscrimination Copyright 2004South Western a MonopolistwithSinglePrice Price 0 Quantity Figure10WelfarewithandwithoutPriceDiscrimination Copyright 2004South Western b MonopolistwithPerfectPriceDiscrimination Price 0 Quantity PRICEDISCRIMINATION ExamplesofPriceDiscriminationMovieticketsAirlinepricesDiscountcouponsFinancialaidQuantitydiscounts First DegreePriceDiscriminationinPractice Quantity Q Sixpricesexistresultinginhigherprofits WithasinglepriceP 4 therearefewerconsumers DiscriminatinguptoP6 competitiveprice willincreaseprofits Second DegreePriceDiscrimination Insomemarkets consumerspurchasemanyunitsofagoodovertimeDemandforthatgooddeclineswithincreasedconsumptionElectricity water heatingfuelFirmscanengageinsecond degreepricediscriminationPracticeofchargingdifferentpricesperunitfordifferentquantitiesofthesamegoodorservice Second DegreePriceDiscrimination Quantitydiscountsareanexampleofsecond degreepricediscriminationEx BuyinginbulkatSam sClubBlockpricing thepracticeofchargingdifferentpricesfordifferentquantitiesof blocks ofagoodEx electricpowercompanieschargedifferentpricesforaconsumerpurchasingasetblockofelectricity Second DegreePriceDiscrimination Q Withoutdiscrimination P P0andQ Q0 Withsecond degreediscriminationtherearethreeblockswithpricesP1 P2 P3 Quantity Differentpricesarechargedfordifferentquantitiesor blocks ofsamegood Third DegreePriceDiscrimination PracticeofdividingconsumersintotwoormoregroupswithseparatedemandcurvesandchargingdifferentpricestoeachgroupDividesthemarketintotwogroupsEachgrouphasitsowndemandfunction PriceDiscrimination ThirdDegreePriceDiscriminationMostcommontypeofpricediscriminationExamples airlines premiumvs non premiumliquor discountstostudentsandseniorcitizens frozenvs cannedvegetables Third DegreePriceDiscrimination SamecharacteristicisusedtodividetheconsumergroupsTypically elasticitiesofdemanddifferforthegroupsCollegestudentsandseniorcitizensarenotusuallywillingtopayasmuchasothersbecauseoflowerincomesThesegroupsareeasilydistinguishablewithID s CONCLUSION THEPREVALENCEOFMONOPOLY Howprevalentaretheproblemsofmonopolies Monopoliesarecommon Mostfirmshavesomecontrolovertheirpricesbecauseofdifferentiatedproducts Firmswithsubstantialmonopolypowerarerare Fewgoodsaretrulyunique Summary Amonopolyisafirmthatisthesolesellerinitsmarket Itfacesadownward slopingdemandcurveforitsproduct Amonopoly smarginalrevenueisalwaysbelowthepriceofitsgood Summary Likeacompetitivefirm amonopolymaximizesprofitbyproducingthequantityatwhichmarginalcostandmarginalrevenueareequal Unlikeacompetitivefirm itspriceexceedsitsmarginalrevenue soitspriceexceedsmarginalcost Summary Amonopolist sprofit maximizinglevelofoutputisbelowthelevelthatmaximizesthesumofconsumerandproducersurplus Amonopolycausesdeadweightlossessimilartothedeadweightlossescausedbytaxes Summary Policymakerscanrespondtotheinefficienciesofmonopolybehaviorwithantitrustlaws regulationofprices orbyturningthemonopolyintoagovernment runenterprise Ifthemarketfailureisdeemedsmall policymakersmaydecidetodonothingatall Summary Monopolistscanraisetheirprofitsbychargingdifferentpricestodifferentbuyersbasedontheirwillingnesstopay Pricediscrimination