Neoclassical imperfect competition THE LATER NEOCLASSICALS参考.pptx

IMPERFECT COMPETITION;EDWARD CHAMBERLIN 1899-1967;MC = MARGINAL COST; AC = AVERAGE COST; D = DEMAND; MR = MARGINAL REVENUE;WITH THE NEW ENTRIES OF OTHER FIRMS INTO THE MARKET, THE DEMAND FOR THE PRODUCT OF THE ORIGINAL MONOPOLY IS EVENTUALLY REDUCED, AND REDUCES TO THE POINT WHERE AC IS NOW TANGENT TO DEMAND, AND PRICE CHARGED IS P, WHICH IS NOW EQUAL TO AC;THIS CONCEPT OF MONOPOLISTIC COMPETITION LED TO THE ALLOCATIVE INEFFICIENCY – X-INEFFICIENCY DEBATES;;;;;;;;JOAN ROBINSON (1903 -1983);IMPERFECT COMPETITION: THE CASE OF MONOPSONY;MONOPSONY:SINGLE BUYER IN THE INPUT MARKET- SINGLE SELLER OF THE INPUT CASE ---- VMP = VALUE OF MARGINAL PRODUCT, MC = MARGINAL COST, MR = MARGINAL REVENUE;MONOPSONY:SINGLE BUYER IN THE INPUT MARKET- COMPETITIVE SELLING OF THE INPUT CASE ---- VMP = VALUE OF MARGINAL PRODUCT, MC = MARGINAL COST, MR = MARGINAL REVENUE;ROBINSON WOULD SUGGEST THAT THE PURPOSE OF UNIONS WOULD BE TO NEGOTIATE A WAGE UPWARDS FROM THE MONOPSONY RETURN TO THE VMP RETURN;;;BERGMANN’S ANALYSIS REFINED;Another look at “monopsony” //// return to input, w, is higher as derived from demand (MRP) = supply than it is from marginal cost = MRP;Maximize profits at TR(L) – W(L)L ?TR/?L = W(L) + ?W(L)/?L So new workers get W’(L)L more than W(L) Same for buying other inputs