topic2MarketFailure外文文献.ppt

Figure 10 Welfare with and without Price Discrimination Profit (a) Monopolist with Single Price Price 0 Quantity Deadweight loss Demand Marginal revenue Consumer surplus Quantity sold Monopoly price Marginal cost Figure 10 Welfare with and without Price Discrimination Profit (b) Monopolist with Perfect Price Discrimination Price 0 Quantity Demand Marginal cost Quantity sold PRICE DISCRIMINATION Examples of Price Discrimination Movie tickets Airline prices Discount coupons Financial aid Quantity discounts CONCLUSION: THE PREVALENCE OF MONOPOLY How prevalent are the problems of monopolies? Monopolies are common. Most firms have some control over their prices because of differentiated products. Firms with substantial monopoly power are rare. Few goods are truly unique. Government-Created Monopolies Governments may restrict entry by giving a single firm the exclusive right to sell a particular good in certain markets. Government-Created Monopolies Patent and copyright laws are two important examples of how government creates a monopoly to serve the public interest. Natural Monopolies An industry is a natural monopoly when a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. Natural Monopolies A natural monopoly arises when there are economies of scale over the relevant range of output. Figure 1 Economies of Scale as a Cause of Monopoly Copyright ? 2004 South-Western Quantity of Output Average total cost 0 Cost HOW MONOPOLIES MAKE PRODUCTION AND PRICING DECISIONS Monopoly versus Competition Monopoly Is the sole producer Faces a downward-sloping demand curve Is a price maker Reduces price to increase sales Competitive Firm Is one of many producers Faces a horizontal demand curve Is a price taker Sells as much or as little at same price Figure 2 Demand Curves for Competitive and Monopoly Firms Quantity of Output Demand (a) A Competitive Firm ’ s Demand Curve (b) A Monopolist ’ s Demand Curve 0 Price Quantity