中级微观经济学讲义12－垄断.pdf

Chapter 12 MODELS OF MONOPOLY By WALTER NICHOLSON Slides prepared by Linda Ghent (Eastern Illinois University) Modified by Huihua NIE (Renmin Unversity of China) www.ChinaES. 1 Monopoly • Market structure: perfect competition, monopolistic competition, oligopoly, monopoly • Key: entry barrier, pricing • A monopoly is a single supplier to a market • This firm may choose to quantity or price at any point of demand curve www.ChinaES. 2 Barriers to Entry • Barriers to entry are the source of all monopoly power – technical barriers (objective) • unique resources: special knowledge, land location • natural monopoly: the production of a good may exhibit decreasing marginal and average costs over a wide range of output levels – legal barriers (subjective) • patent, administrative regulation www.ChinaES. 3 Creation of Barriers to Entry • Some barriers to entry result from actions taken by the firm (endogenous) – research and development (RD) – purchase of unique resources – political lobbying (regulatory capture) • The attempt by a monopolist to erect barriers to entry may involve real resource costs (rent-seeking) www.ChinaES. 4 Profit Maximization [ ( ) ] d dRp q q  dp marginal revenue ( ) MR q p  q