nicholson微观经济理论（答案+PPT+习题库）-ch13.pptVIP

Chapter 13 MODELS OF MONOPOLY Monopoly A monopoly is a single supplier to a market This firm may choose to produce at any point on the market demand curve Barriers to Entry The reason a monopoly exists is that other firms find it unprofitable or impossible to enter the market Barriers to entry are the source of all monopoly power there are two general types of barriers to entry technical barriers legal barriers Technical Barriers to Entry The production of a good may exhibit decreasing marginal and average costs over a wide range of output levels in this situation, relatively large-scale firms are low-cost producers firms may find it profitable to drive others out of the industry by cutting prices this situation is known as natural monopoly once the monopoly is established, entry of new firms will be difficult Technical Barriers to Entry Another technical basis of monopoly is special knowledge of a low-cost productive technique it may be difficult to keep this knowledge out of the hands of other firms Ownership of unique resources may also be a lasting basis for maintaining a monopoly Legal Barriers to Entry Many pure monopolies are created as a matter of law with a patent, the basic technology for a product is assigned to one firm the government may also award a firm an exclusive franchise to serve a market Creation of Barriers to Entry Some barriers to entry result from actions taken by the firm research and development of new products or technologies purchase of unique resources lobbying efforts to gain monopoly power The attempt by a monopolist to erect barriers to entry may involve real resource costs Profit Maximization To maximize profits, a monopolist will choose to produce that output level for which marginal revenue is equal to marginal cost marginal revenue is less than price because the monopolist faces a downward-sloping demand curve he must lower its price on all units to be sold if it is to generate the extra demand for this unit Profit Maximization S