《管理经济学》第八章.ppt

Performance and Strategy in Competitive Markets Chapter 8 Chapter 8OVERVIEW Competitive Market Efficiency Market Failure Role for Government Subsidy and Tax Policy Tax Incidence and Burden Price Controls Business Profit Rates Market Structure and Profit Rates Competitive Market Strategy Chapter 8KEY CONCEPTS welfare economics social welfare producer surplus deadweight loss problem welfare loss triangle market power market failure failure by market structure externalities failure by incentive economic efficiency economic regulation social equity consumer sovereignty limit concentration subsidy policy tradable emission permits deadweight loss of taxation tax incidence tax burden price floor price ceiling return on stockholders’ equity (ROE) profit margin total asset turnover leverage reversion to the mean disequilibrium profits disequilibrium losses economic luck competitive strategy economic rents Competitive Market Efficiency Why is it called Perfect Competition? Competitive markets balance supply and demand. Competitive markets maximize social welfare Deadweight Loss Problem Any cost suffered by consumers or producers that is not transferred, but simply lost. Deadweight Loss Illustration Market Failure Structural Problems Above-normal profits are unwarranted if they reflect the raw exercise of market power. Failure occurs when competitive markets do not sustain socially desirable activity. Failure can occur in markets with few participants. Incentive Problems Externalities are differences between private and social costs or benefits. A negative externality is an unpaid cost. A positive externality is an unrewarded benefit. Role for Government How Government Influences Competitive Markets Tax policy or regulation is efficient if expected benefits exceed expected costs. Fairness must be carefully weighed when social considerations bear heavily. Broad Social Considerations Consumer sovereignty is an important benefit of competitive markets. Public policy