ppt课件-two- step distribution whythe middleman（所谓中间人认识论两步分布）.pptVIP

Two-Step Distribution: Why the Middleman? Manufacturer sells to retailer at price p. Retailer then sells to consumer at price Pr. Manufacturer’s marginal cost is constant = mc Retailer’s marginal cost is simply p (he has no additional marginal cost of retailing) or Mfr sells direct to consumer at price Pm . In addition to marginal cost of production, mc, mfr has marginal cost of retailing = k. Consumer demand given by P = a – b x where x = quantity bought at price P Case I: Manufacturer Sells thru Middleman Retailer’s total revenue = TRr = Pr x = (a-bx)x Manufacturer figures retailer equates his marginal revenue (MR =a–2 bx) to his marginal cost (MC = p) p = a – 2 b x Manufacturer’s total revenue =TRm=px=(a-2bx)x Mfr equates his marginal revenue (MR = a - 4bx) to his marginal cost (mc). Then a – 4 bx = mc ; x = (a – mc)/4b and p = a – 2bx = ? a + ? mc Pr = a – bx = ? a + ? mc Profitretailer = (Pr– p) x = 1/16 (a – mc)2 /b Profitmfr = (p – mc) x = 1/8 (a – mc)2 /b Profittotal = 3/16 (a – mc)2 /b Case II: Manufacturer Sells Direct to Consumer Manufacturer’s total revenue = TR = Pm x = (a-bx)x Manufacturer equates marginal revenue (= a – 2bx) to marginal cost (= mc + k). Then x = ? (a – mc – k)/b Pm = a – b x = ? (a + mc + k) Profitmfr = (Pm – mc – k) x = ? (a – mc – k)2/b Middleman or Sell Direct??? When manufacturer sells thru middleman Profitmfr = 1/8 (a – mc)2 /b When manufacturer sells direct Profitmfr = ? (a – mc – k)2/b Manufacturer will sell thru middleman when k [1 – 1/sqrt(2)] (a – mc) = .29 (a – mc) As manufacturing productivity increases, mc falls and retailing is increasingly turned over to middlemen ? growth of retail sector relative to mfg sector More of mfg cost reduction is passed on to consumers when manufacturer sells direct dPm/dmc = ? vs dPr/dmc = ? Franchise the Middleman? Even when k.29(a-mc), the manufacturer may prefer to sell thru a middleman Can he charge a fixed franchise fee, F, that transfers the