平狄克 微观经济学 第十章 Market Power-Monopoly and Monopsony课件.ppt

Chapter 10;Topics to be Discussed;Topics to be Discussed;Perfect Competition;Perfect Competition;Monopoly;Monopoly;Monopoly;Total, Marginal, and Average Revenue;Average and Marginal Revenue;Monopoly;Monopoly;Maximizing Profit When Marginal Revenue Equals Marginal Cost;Lost profit;Monopoly;Monopoly;Monopoly;Monopoly;Quantity;Example of Profit Maximization;Profit;Example of Profit Maximization;Monopoly;A Rule of Thumb for Pricing;A Rule of Thumb for Pricing;A Rule of Thumb for Pricing;= the markup over MC as a percentage of price (P-MC)/P;A Rule of Thumb for Pricing;Monopoly;Monopoly;Astra-Merck Prices Prilosec;Astra-Merck Prices Prilosec;Monopoly;D2;D1;Monopoly;Monopoly;Monopoly;Effect of Excise Tax on Monopolist;Question Suppose: Ed = -2 How much would the price change?;Answer What would happen to profits?;Monopoly;Monopoly;Monopoly;Monopoly;Monopoly;Monopoly;Production with Two Plants;Production with Two Plants;Monopoly Power;Monopoly Power;Quantity;At a market price of $1.50, elasticity of demand is -1.5.;Monopoly Power;Monopoly Power;Monopoly Power;Monopoly Power;Elasticity of Demand and Price Markup;Markup Pricing:Supermarkets to Designer Jeans;Convenience Stores;Convenience stores have more monopoly power. Question: Do convenience stores have higher profits than supermarkets?;Designer jeans Ed = -3 to -4 Price 33 - 50% MC MC = $12 - $18/pair Wholesale price = $18 - $27;The Pricing ofPrerecorded Videocassettes;What Do You Think? Should producers lower the price of videocassettes to increase sales and revenue?;Sources of Monopoly Power;Sources of Monopoly Power;The Social Costs of Monopoly Power;B;Rent Seeking Firms may spend to gain monopoly power Lobbying Advertising Building excess capacity;The incentive to engage in monopoly practices is determined by the profit to be gained. The larger the transfer from consumers to the firm, the larger the social cost of monopoly.;Example 1996 Archer Daniels Midland (ADM) successfully lobbied for regulations requiring e