平狄克《微观经济学》课后答案 9.docVIP

CHAPTER 9 THE ANALYSIS OF COMPETITIVE MARKETS TEACHING NOTES With the exception of Chapter 1, Chapter 9 is the most straightforward and easily understood chapter in the text. The chapter begins with a review of consumer and producer surplus. If you have postponed these topics, you should carefully explain the definition of each (refer to teaching suggestions in Chapters 4 and 8). While Section 2 discusses efficiency in competitive markets by comparing competitive outcomes with those under market failure, more analytic discussion of efficiency is left for Chapter 16. REVIEW QUESTIONS 1. Deadweight loss refers to the benefits lost to either consumers or producers when markets do not operate efficiently. The term deadweight denotes that these are benefits unavailable to any party. For example, an effective price ceiling reduces the price below the market equilibrium price. This policy causes a loss of both consumer and producer surpluses. Consumer surplus decreases because less is purchased and producers do not capture all of this decrease. Producer surplus decreases because less is produced and consumers do not capture all of this decrease. Surplus not captured by market participants is deadweight loss. 2. When the supply curve is completely inelastic, the imposition of an effective price ceiling transfers all loss in producer surplus to consumers. Consumer surplus increases by the difference between the market-clearing price and the price ceiling times the market-clearing quantity. Consumers capture all decreases in total revenue. Therefore, no deadweight loss occurs. 3. If the supply curve was perfectly inelastic and demand increases, a price ceiling will increase consumer surplus. If the demand curve is inelastic, price controls may result in a net loss of consumer surplus because consumers willing to pay a higher price are unable to purchase the price-controlled good or service. The loss of consumer surplus is greater than the transfer of producer su