Chapter 12 Monopolistic Competition竞争.pptVIP

Chapter 12 Monopolistic Competition  and Oligopoly Chapter Outline Monopolistic Competition Oligopoly (寡头垄断) Price Competition Competition versus Collusion: The Prisoners’ Dilemma for Oligopolistic Pricing Cartels 12.1 Monopolistic Competition Monopolistic competition -- Market in which firms can enter freely, each producing its own brand or version of a differentiated product. Oligopoly -- Market in which only a few firms compete with one another, and entry by new firms is impeded. Cartel -- Market in which some or all firms explicitly collude, coordinating prices and output levels to maximize joint profits. Because the firm is the only producer of its brand, it faces a downward-sloping demand curve: Price exceeds marginal cost and the firm has monopoly power. In the short run described in part (a), price also exceeds average cost, and the firm earns profits shown by the shaded rectangle. In the long run, these profits attract new firms with competing brands. The firms market share falls, and its demand curve shifts downward. In long-run equilibrium, described in part (b), price equals average cost, so the firm earns zero profit, even though it has monopoly power. Under perfect competition, as in (a), price equals marginal cost, but under monopolistic competition, price exceeds marginal cost, so there is a deadweight loss as shown by the shaded area in (b). In both type of markets, entry occurs until profits are driven to zero. Under perfect competition, the demand curve facing the firm is horizontal, so the zero-profit point occurs at the point of minimum average cost. Under monopolistic competition the demand curve is downward sloping, so the zero-profit point is to the left of the point of minimum average cost. In evaluating monopolistic competition, these inefficiencies must be balanced (抵消) against the gains to consumers from product diversity. 12.2 Ol