Ch24Monopoly(微观-范里安-(上海交通大学,赵旭 ).ppt

Chapter Twenty-Four Monopoly Pure Monopoly A monopolized market has a single seller. The monopolist’s demand curve is the (downward sloping) market demand curve. So the monopolist can alter the market price by adjusting its output level. Pure Monopoly Why Monopolies? What causes monopolies? a legal fiat; e.g. US Postal Service Why Monopolies? What causes monopolies? a legal fiat; e.g. US Postal Service a patent; e.g. a new drug Why Monopolies? What causes monopolies? a legal fiat; e.g. US Postal Service a patent; e.g. a new drug sole ownership of a resource; e.g. a toll highway Why Monopolies? What causes monopolies? a legal fiat; e.g. US Postal Service a patent; e.g. a new drug sole ownership of a resource; e.g. a toll highway formation of a cartel; e.g. OPEC Why Monopolies? What causes monopolies? a legal fiat; e.g. US Postal Service a patent; e.g. a new drug sole ownership of a resource; e.g. a toll highway formation of a cartel; e.g. OPEC large economies of scale; e.g. local utility companies. Pure Monopoly Suppose that the monopolist seeks to maximize its economic profit, What output level y* maximizes profit? Profit-Maximization Profit-Maximization Profit-Maximization Profit-Maximization Profit-Maximization Profit-Maximization Profit-Maximization Profit-Maximization Marginal Revenue Marginal Revenue Marginal Revenue Marginal Revenue Marginal Cost Marginal Cost Profit-Maximization; An Example Profit-Maximization; An Example Profit-Maximization; An Example Profit-Maximization; An Example Profit-Maximization; An Example Profit-Maximization; An Example Monopolistic Pricing Own-Price Elasticity of Demand Suppose that market demand becomes less sensitive to changes in price (i.e. the own-price elasticity of demand becomes less negative). Does the monopolist exploit this by causing the market price to rise? Monopolistic Pricing Own-Price Elasticity of Demand Monopolistic Pricing Own-Price Elasticity of Demand Monopolistic Pricing Own-Price Elasticity of Dema