微观经济学17_18.docVIP

17 FACTOR MARKETS Every firm faces two kinds of market: ----output market for selling products ----input market for buying factors Comparing to the firm in a competitive product market and competitive factor market: pMP(xc) = w. Monopoly in the Output Market Firm has a monopoly for its output, with inverse demand function p =p(y) The production function with one factor y = f(x). Firm’s revenue R(y) = p(y)y = p(y(x)) y(x) Marginal revenue product: (边际收益产品) =MRy (MPx For the monopoly MRy = p + y p then MRPx pMPx. Consider a firm in a competitive factor market. It faces a constant price of w. The firm’s profits ( = R - wx Firm wants to hire xm units of the factor where MRP(xm) = w. w w MR MP pMP O x m xc x Monopsony in factor market In a monopsony there is a single buyer. A monopsonist is a price maker in factor market. Assume that it sells output in a competitive market. The firm produces output using a single factor: y = f(x) The amount of the factor that firm demands will influence the price for this factor: w = w(x) The profit maximization problem facing the monopsonist is The solution of monopsony is given pMPx = = w + x Marginal factor cost (MFC): MCx = = w + x w MCx w(x) w* pMPx O x m x Example: linear supply curve for the factor: w(x) = a + bx w MCx w(x) w* pMPx O x m x The total costs of firm: C(x) = w(x)x = ax + bx2 The MFC MCx (x) = a + 2bx. Firm’s demand for factor when the price of product is p: pMPx = a + 2bx. EXAMPLE:The Minimum Wage Competitive labor market the government sets a minimum wage the supply of labor will exceed the demand. w