theanalysisofcompetitivemarkets(编辑修改稿)

theanalysisofcompetitivemarkets(编辑修改稿)内容摘要：

f the tax. The burden of the tax is split evenly. Chapter 9 Slide 45 Incidence of a Specific Tax  Four conditions that must be satisfied after the tax is in place: 1) Quantity sold and Pb must be on the demand line: QD = QD(Pb) 2) Quantity sold and PS must be on the supply line: QS = QS(PS) Chapter 9 Slide 46 Incidence of a Specific Tax  Four conditions that must be satisfied after the tax is in place: 3) QD = QS 4) Pb PS = tax Impact of a Tax Depends on Elasticities of Supply and Demand Quantity Quantity Price Price S D S D Q0 P0 P0 Q0 Q1 Pb PS t Q1 Pb PS t Burden on Buyer Burden on Seller Chapter 9 Slide 48  Passthrough fraction  ES/(ES Ed)  For example, when demand is perfectly inelastic (Ed = 0), the passthrough fraction is 1, and all the tax is borne by the consumer. The Impact of a Tax or Subsidy Chapter 9 Slide 49 The Effects of a Tax or Subsidy  A subsidy can be analyzed in much the same way as a tax.  It can be treated as a negative tax.  The seller’s price exceeds the buyer’s price. Chapter 9 Slide 50 D S Subsidy Quantity Price P0 Q0 Q1 PS Pb s Like a tax, the benefit of a subsidy is split between buyers and sellers, depending upon the elasticities of supply and demand. Chapter 9 Slide 51 Subsidy  With a subsidy (s), the selling price Pb is below the subsidized price PS so that:  s = PS Pb Chapter 9 Slide 52 Subsidy  The benefit of the subsidy depends upon Ed /ES.  If the ratio is small, most of the benefit accrues to the consumer.  If the ratio is large, the producer benefits most. Chapter 9 Slide 53 Summary  Simple models of supply and demand can be used to analyze a wide variety of government policies.  In each case, consumer and producer surplus are used to evaluate the gains and losses to consumers and producers. Chapter 9 Slide 54 Summary  When government imposes a tax or subsidy, price usually does not rise or fall by the full amount of the tax or subsidy.  Government intervention generally leads to a deadweight loss. Chapter 9 Slide 55 Summary  Government intervention in a petitive market is not always a bad thing. End of Chapter 9 The Analysis of Competitive Markets Chapter 9 Slide 57 Chapter 10 Market Power: Monopoly and Monopsony Chapter 9 Slide 58 Topics to be Discussed  Monopoly  Monopoly Power  Sources of Monopoly Power  The Social Costs of Monopoly Power Chapter 9 Slide 59 Topics to be Discussed  Monopsony  Monopsony Power  Limiting Market Power: The Antitrust Laws Chapter 9 Slide 60 Perfect Competition  Review of Perfect Competition  P = LMC = LRAC  Normal profits or zero economic profits in the long run  Large number of buyers and sellers  Homogenous product  Perfect information  Firm is a price taker Chapter 9 Slide 61 Perfect Competition Q Q P P Market Individual Firm D S Q0 P0 P0 D = MR = P q0 LRAC LMC Chapter 9 Slide 62 Monopoly  Monopoly 1) One seller many buyers 2) One product (no good substitutes) 3) Barriers to entry Chapter 9 Slide 63 Monopoly  The monopolist is the supplyside of the market and has plete control over the amount offered for sale.  Profits will be maximized at the level of output where marginal revenue equals marginal cost. Chapter 9 Slide 64 Monopoly  Finding Marginal Revenue  As the sole producer, the monopolist works with the market demand to determine output and price.  Assume a firm with demand: P = 6 Q Chapter 9 Slide 65 Total, Marginal, and Average Revenue $6 0 $0 5 1 5 $5 $5 4 2 8 3 4 3 3 9 1 3 2 4 8 1 2 1 5 5 3 1 Total Marginal Average Price Quantity Revenue Revenue Revenue P Q R MR AR Chapter 9 Slide 66 Average and Marginal Revenue Output 0 1 2 3 $ per unit of output 1 2 3 4 5 6 7 4 5 6 7 Average Revenue (Demand) Marginal Revenue Chapter 9 Slide 67 Monopoly  Observations 1) To increase sales the price must fall 2) MR P 3) Compared to perfect petition No change in price to change sales MR = P Chapter 9 Slide 68 Monopoly  Monopolist’s Output Decision 1) Profits maximized at the output level where MR = MC 2) Cost functions are the same MRMCorMRMCQCQRCQRQ0///)()()(Chapter 9 Slide 69 Maximizing Profit When Marginal Revenue Equals Marginal Cost  At output levels below MR = MC the decrease in revenue is greater than the decrease in cost (MR MC).  At output levels above MR = MC the increase in cost is greater than the decrease in revenue (MR MC) The Monopolist’s Output Decision Chapter 9 Slide 70 Lost profit P1 Q1 Lost profit MC AC Quantity $ per unit of output D = AR MR P* Q* Maximizing Profit When Marginal Revenue Equals Marginal Cost P2 Q2 Chapter 9 Slide 71 Monopoly  An Example CMCCC o s t250)(2The Monopolist’s Output Decision Chapter 9 Slide 72 Monopoly  An Example RMRPQRPDema n d24040)()(40)(2The Monopolist’s Output Decision Chapter 9 Slide 73 Monopoly  An Example 30 10,W h en 102240P orMCMRThe Monopolist’s Output Decision Chapter 9 Slide 74 Monopoly  An Example  By setting marginal revenue equal to marginal cost, it can be verified that profit is maximized at P = $30 and Q = 10.  This can be seen graphically: The Monopolist’s Output Decision Chapter 9 Slide 75 Quantity $ 0 5 10 15 20 100 150 200 300 400 50 R Profits t t39。 c c’ Example of Profit Maximization C Chapter 9 Slide 76 Example of Profit Maximization  Observations。