Microeconomics 2011 Chapter 13 微观经济 讲解材料.ppt

COURSE SCHEDULE;Grading;eBay, Google, and Microsoft are dominant players in the markets they serve. These firms are not like the firms in perfect competition. How do firms that dominate their markets behave? Do they charge prices that are too high and that damage the interest of consumers? Students get lots of price breaks—at the movie theater and the hairdresser and on the airlines. Why? How can it be profit maximizing to offer lower prices to some customers?;Barriers to Entry A constraint that protects a firm from potential competitors are called barriers to entry. Three types of barriers to entry are Natural Ownership Legal;Natural Barriers to Entry Natural barriers to entry create natural monopoly. A natural monopoly is an industry in which economies of scale enable one firm to supply the entire market at the lowest possible cost. Figure 13.1 illustrates a natural monopoly.;One firm can produce 4 millions units of output at 5 cents per unit. Two firms can produce 4 million units—2 units each—at 10 cents per unit.;In a natural monopoly, economies of scale are so powerful that they are still being achieved even when the entire market demand is met. The LRAC curve is still sloping downward when it meets the demand curve.;Ownership Barriers to Entry An ownership barrier to entry occurs if one firm owns a significant portion of a key resource. During the last century, De Beers owner 90 percent of the world’s diamonds.;Legal Barriers to Entry Legal barriers to entry create a legal monopoly. A legal monopoly is a market in which competition and entry are restricted by the granting of a Public franchise (like the China post, a public franchise to deliver mail) Government license (like a license to practice law or medicine) Patent or copyright;Legal Barriers to Entry What professions do you need a license to do? - doctor, dentist, pharmacist, etc… - lawyer, financial advisor - plumber, construction worker What examples are there of a patent or copyright?