AP微观经济学 第四单元 不完全竞争市场 知识点总结课件 AP Microeconomics Unit 4 Summary.pptVIP

* Many prices More profit 2007#1 Given current resources, the firm can produce at the lowest costs (minimum ATC) but they decide not to. The gap between the minimum ATC output and the profit maximizing output. Not the amount underproduced * Excess Capacity D MR MC * Q P LONG-RUN EQUILIBRIUM ATC QLR PLR The firm can produce at a lower cost but it holds back production to maximize profit QProd Efficient Excess Capacity Large number of firms and product variation meets societies needs. Nonprice Competition (product differentiation and advertising) may result in sustained profits for some firms. Ex: Nike might continue to make above normal profit because they are a well known brand. Advantages of MONOPOLISTIC COMPETITION * Oligopoly FOUR MARKET MODELS Characteristics of Oligopolies: A Few Large Producers (Less than 10) Identical or Differentiated Products High Barriers to Entry Control Over Price (Price Maker) Mutual Interdependence Firms use Strategic Pricing Examples: OPEC, Cereal Companies, Car Producers Perfect Competition Pure Monopoly Monopolistic Competition Oligopoly Oligopolies occur when only a few large firms start to control an industry. High barriers to entry keep others from entering. Types of Barriers to Entry 1. Economies of Scale Ex: The car industry is difficult to enter because only large firms can make cars at the lowest cost 2. High Start-up Costs 3. Ownership of Raw Materials HOW DO OLIGOPOLIES OCCUR? Game Theory An understanding of game theory helps firms in an oligopoly maximize profit. The study of how people behave in strategic situations Game theory helps predict human behavior THE ICE CREAM MAN SIMULATION 1. You are a ice cream salesmen at the beach 2. You have identical prices as another salesmen. 3. Beachgoers will purchase from the closest salesmen 4. People are evenly distributed along the beach. 5. Each morning the two firms pick locations on the beach Where is the best location? Why learn about game theory? Oligopolies are int