微观经济学profitmaximizationandcompetitivesupply(编辑修改稿)

微观经济学profitmaximizationandcompetitivesupply(编辑修改稿)内容摘要：

Industry Supply in the Short Run $ per unit S The shortrun industry supply curve is the horizontal summation of the supply curves of the firms. Q 15 21 P1 P3 P2 10 8 2 4 7 5 169。 2020 Pearson Education, Inc. Chapter 8 40 The ShortRun Market Supply Curve  As price rises, firms expand their production  Increased production leads to increased demand for inputs and could cause increases in input prices  Increases in input prices cause MC curve to rise  This lowers each firm’s output choice  Causes industry supply to be less responsive to change in price than would be otherwise 169。 2020 Pearson Education, Inc. Chapter 8 41 Elasticity of Market Supply Elasticity of Market Supply Measures the sensitivity of industry output to market price The percentage change in quantity supplied, Q, in response to 1percent change in price )//()/( PPE s 169。 2020 Pearson Education, Inc. Chapter 8 42 Elasticity of Market Supply  When MC increases rapidly in response to increases in output, elasticity is low  When MC increases slowly, supply is relatively elastic  Perfectly inelastic shortrun supply arises when the industry’s plant and equipment are so fully utilized that new plants must be built to achieve greater output  Perfectly elastic shortrun supply arises when marginal costs are constant 169。 2020 Pearson Education, Inc. Chapter 8 43 Producer Surplus in the Short Run  Price is greater than MC on all but the last unit of output  Therefore, surplus is earned on all but the last unit  The producer surplus is the sum over all units produced of the difference between the market price of the good and the marginal cost of production  Area above supply curve to the market price 169。 2020 Pearson Education, Inc. Chapter 8 44 Producer Surplus Producer surplus is area above MC to the price Producer Surplus for a Firm Price ($ per unit of output) Output AVC MC A B P q* At q* MC = MR. Between 0 and q, MR MC for all units. 169。 2020 Pearson Education, Inc. Chapter 8 45 The ShortRun Market Supply Curve Sum of MC from 0 to q*, it is the sum of the total variable cost of producing q* Producer Surplus can be defined as the difference between the firm’s revenue and its total variable cost We can show this graphically by the rectangle ABCD Revenue (0ABq*) minus variable cost (0DCq*) 169。 2020 Pearson Education, Inc. Chapter 8 46 Producer surplus is also ABCD = Revenue minus variable costs Producer Surplus for a Firm Price ($ per unit of output) Output Producer Surplus AVC MC A B P q* C D 169。 2020 Pearson Education, Inc. Chapter 8 47 Producer Surplus Versus Profit Profit is revenue minus total cost (not just variable cost) When fixed cost is positive, producer surplus is greater than profit V C R PS S u r p l u s P r o d u ce r FC V C R P r o fi t  169。 2020 Pearson Education, Inc. Chapter 8 48 Producer Surplus Versus Profit Costs of production determine magnitude of producer surplus Higher cost firms have less producer surplus Lower cost firms have more producer surplus Adding up surplus for all producers in the market given total market producer surplus Area below market price and above supply curve 169。 2020 Pearson Education, Inc. Chapter 8 49 D P* Q* Producer Surplus Market producer surplus is the difference between P* and S from 0 to Q*. Producer Surplus for a Market Price ($ per unit of output) Output S 169。 2020 Pearson Education, Inc. Chapter 8 50 Choosing Output in the Long Run In short run, one or more inputs are fixed Depending on the time, it may limit the flexibility of the firm In the long run, a firm can alter all its inputs, including the size of the plant We assume free entry and free exit No legal restrictions or extra costs 169。 2020 Pearson Education, Inc. Chapter 8 51 Choosing Output in the Long Run  In the short run, a firm faces a horizontal demand curve Take market price as given  The shortrun average cost curve (SAC) and shortrun marginal cost curve (SMC) are low enough for firm to make positive profits (ABCD)  The longrun average cost curve (LRAC) Economies of scale to q2 Diseconomies of scale after q2 169。 2020 Pearson Education, Inc. Chapter 8 52 q1 B C A D In the short run, the firm is faced with fixed inputs. P = $40 ATC. Profit is equal to ABCD. Output Choice in the Long Run Price Output P = MR $40 SAC SMC q3 q2 $30 LAC LMC 169。 2020 Pearson Education, Inc. Chapter 8 53 Output Choice in the Long Run Price Output q1 B C A D P = MR $40 SAC SMC q3 q2 $30 LAC LMC In the long run, the plant size will be increased and output increased to q3. Longrun profit, EFGD short run profit ABCD. F G 169。 2020 Pearson Education, Inc. Chapter 8 54 LongRun Competitive Equilibrium For long run equilibrium, firms must have no desire to enter or leave the industry We can relate economic profit to the incentive to enter and exit the market Need to relate accounting profit to economic profit 169。 2020 Pearson Education, Inc. Chapter 8 55 LongRun Competitive Equilibrium Accounting profit Difference between firm’s revenues and direct costs Economic profit Difference between firm’s revenues and direct and indirect costs Takes into account opportunity costs 169。 2020 Pearson Education, Inc. Chapter 8 56 LongRun Competitive Equilibrium Firm uses labor (L) and capital (K) with purchased capital Accounting Profit and Economic Profit Accounting profit:  = R wL Economic profit:  = R = wL rK  wl = labor cost  rk = opportunity cost of capital 169。 2020 Pearson Education, Inc. Chapter 8 57 LongRun Competitive Equilibrium ZeroProfit。