MANAGERIAL ECONOMICS 11th Edition - 成都信息工程.pptVIP

Chapter 9 Key Concepts monopoly price maker Barriers to entry deadweight loss natural monopoly patent monopsony Price discrimination bilateral monopoly antitrust law Overview 一. Definition and features of monopoly 二.Barriers to entry 三.Profit Maximization 四.Social Costs of Monopoly 五.Social Benefits From Monopoly 六.Monopoly Regulation 七. Antitrust Policy Learning objectives Why some markets have only one seller. How a monopoly determines the quantity to produce and the price to charge. How the monopoly’s decisions affect economic well-being. The various public policies aimed at solving the problem of monopoly. Why monopolies try to charge different prices to different customers. 一. Definition and Features of monopoly Definition Why monopolies arise? barriers to entry Control of inputs De Beers Economies of scale natural monopoly: when a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. Figure Economies of Scale as a Cause of Monopoly Patents or license Governments may restrict entry by giving a single firm the exclusive right to sell a particular good in certain markets. 三.Profit Maximization in Monopoly Markets To review Perfect competition Figure Demand Curves for Competitive and Monopoly Firms Steps to determine profit-maximizing output, price, and economic profit Step 1. MR=MC →optimal Q* Step 2. vertical line to the demand curve → optimal P* Step 3. Economic profit Method 1: (P- ATC) ×Q* Method 2: P*Q*﹣ATC×Q* 四. Social Costs of Monopoly Monopoly Underproduction too little output. too high prices Deadweight Loss a loss in social welfare a wealth transfer problem Figure welfare in competitive market Competitive market equilibrium Qs=-40+4P→ P=10+0.25Qs Qd=170-2P→ P=85-0.5Qd Qd=Qs Solution: Pe=35 Qe=100 Figure Consumer and Producer Surplus in the Market Equilibrium Monopoly: Qs=-40+4P→ P=10+0.25Qs Qd=170