曼昆微观经济学第十六章垄断竞争.pptVIP

* * The graphical analysis of the monopolistically competitive firm’s output, price, and profits/losses is very similar to that of the monopoly firm. One subtle difference is that the demand curve (and MR curve) facing the monopolistically competitive firm is likely to be flatter than the demand curve facing the monopolist, as the monopolistic competitor faces competition from other firms selling similar products. * * The level of output that minimizes ATC is greater than the output that maximizes the monopolistic competitor’s profits. Hence, we say the monopolistic competitor operates with excess capacity. (More on this topic on the next slide.) * * Due to the markup of price over marginal cost, the market output under monopolistic competition will be smaller than the socially efficient output, as we discuss on the following slide. * * The problem facing policymakers here is similar to the problem arising from natural monopoly: With natural monopoly, ATC is always falling, so MC is below ATC. If regulators force a natural monopoly to price at marginal cost, it will incur losses. * * One of these externalities is positive, the other is negative. It’s not clear which one is bigger, and it may in fact differ by industry. * Consider breaking up your lecture with a 10 minute discussion. First, give your students a few quiet moments to formulate their responses. Then, ask for volunteers to share their answers. If you have a chalkboard or dry-erase board, concisely paraphrase each student’s response as it is volunteered. If a student volunteers a “wrong” answer, write it down anyway. After the class has generated a list, have the class go over each item on the list to make sure it really belongs on the list. Benefits: 1) Breaks up the lecture into chunks. 2) Engages students. 3) Gets students to think about the implications of the market structures they’ve studied so far. (Hopefully, some will recognize that product differentiation is a