Monopolistic Competition, Oligopoly, And Strategic Pricing[垄断竞争，寡头垄断和战略定价 ](PPT-76).ppt

Monopolistic Competition, Oligopoly, and Strategic Pricing Chapter 13 Introduction In discussing real-world competition, the focus quickly becomes market structure. Market structure is the physical characteristics of the market within which firms interact. Introduction Market structure involves the number of firms in the market and the barriers to entry. Introduction Monopolistic competition and oligopoly lie between these two extremes. Introduction Most U.S. industry structures fall almost entirely between monopolistic competition and oligopoly. Perfectly competitive and monopolistic industries are nearly nonexistent. Problems Determining Market Structure Defining a market has problems: What is an industry and what is its geographic market -- local, national, or international? What products are to be included in the definition of an industry? Classifying Industries One of the ways in which economists classify markets is by cross-price elasticities. Cross-price elasticity measures the responsiveness of the change in demand for a good to change in the price of a related good. Classifying Industries Industries are classified by government using the North American Industry Classification System (NAICS). Classifying Industries When economists talk about industry structure the general practice is to refer to three-digit industries. Two- and Four- Digit Industry Groups Determining Industry Structure Economists use one of two methods to measure industry structure: The Concentration Ratio The Herfindahl Index Concentration Ratio The concentration ratio is the percentage of industry output that a specific number of the largest firms have. Concentration Ratio The most commonly used concentration ratio is the four-firm concentration ratio. The Herfindahl Index The Herfindahl index is an alternative method used by economists to classify the competitiveness of an industry. It is calculated by adding the squared value of the market shares of all firms in the industry. The Herfi