曼昆微观经济学英文版15monopoly

Copyright©2004South-Western15MonopolyCopyright©2004South-Western•Whileacompetitivefirmisapricetaker,amonopolyfirmisapricemaker.Copyright©2004South-Western•Afirmisconsideredamonopolyif...•itisthesolesellerofitsproduct.•itsproductdoesnothaveclosesubstitutes.Copyright©2004South-WesternWHYMONOPOLIESARISE•Thefundamentalcauseofmonopolyisbarrierstoentry.Copyright©2004South-WesternWHYMONOPOLIESARISE•Barrierstoentryhavethreesources:•Ownershipofakeyresource.•Thegovernmentgivesasinglefirmtheexclusiverighttoproducesomegood.•Costsofproductionmakeasingleproducermoreefficientthanalargenumberofproducers.Copyright©2004South-WesternMonopolyResources•Althoughexclusiveownershipofakeyresourceisapotentialsourceofmonopoly,inpracticemonopoliesrarelyariseforthisreason.Copyright©2004South-WesternGovernment-CreatedMonopolies•Governmentsmayrestrictentrybygivingasinglefirmtheexclusiverighttosellaparticulargoodincertainmarkets.Copyright©2004South-WesternGovernment-CreatedMonopolies•Patentandcopyrightlawsaretwoimportantexamplesofhowgovernmentcreatesamonopolytoservethepublicinterest.Copyright©2004South-WesternNaturalMonopolies•Anindustryisanaturalmonopolywhenasinglefirmcansupplyagoodorservicetoanentiremarketatasmallercostthancouldtwoormorefirms.Copyright©2004South-WesternNaturalMonopolies•Anaturalmonopolyariseswhenthereareeconomiesofscaleovertherelevantrangeofoutput.Figure1EconomiesofScaleasaCauseofMonopolyCopyright©2004South-WesternQuantityofOutputAveragetotalcost0CostCopyright©2004South-WesternHOWMONOPOLIESMAKEPRODUCTIONANDPRICINGDECISIONS•MonopolyversusCompetition•Monopoly•Isthesoleproducer•Facesadownward-slopingdemandcurve•Isapricemaker•Reducespricetoincreasesales•CompetitiveFirm•Isoneofmanyproducers•Facesahorizontaldemandcurve•Isapricetaker•SellsasmuchoraslittleatsamepriceFigure2DemandCurvesforCompetitiveandMonopolyFirmsCopyright©2004South-WesternQuantityofOutputDemand(a)ACompetitiveFirm’sDemandCurve(b)AMonopolist’sDemandCurve0PriceQuantityofOutput0PriceDemandCopyright©2004South-WesternAMonopoly’sRevenue•TotalRevenuePQ=TR•AverageRevenueTR/Q=AR=P•MarginalRevenueDTR/DQ=MRTable1AMonopoly’sTotal,Average,andMarginalRevenueCopyright©2004South-WesternCopyright©2004South-WesternAMonopoly’sRevenue•AMonopoly’sMarginalRevenue•Amonopolist’smarginalrevenueisalwayslessthanthepriceofitsgood.•Thedemandcurveisdownwardsloping.•Whenamonopolydropsthepricetosellonemoreunit,therevenuereceivedfrompreviouslysoldunitsalsodecreases.Copyright©2004South-WesternAMonopoly’sRevenue•AMonopoly’sMarginalRevenue•Whenamonopolyincreasestheamountitsells,ithastwoeffectsontotalrevenue(PQ).•Theoutputeffect—moreoutputissold,soQishigher.•Thepriceeffect—pricefalls,soPislower.Figure3DemandandMarginal-RevenueCurvesforaMonopolyCopyright©2004South-WesternQuantityofWaterPrice$11109876543210–1–2–3–4Demand(averagerevenue)Marginalrevenue12345678Copyright©2004South-WesternProfitMaximization•Amonopolymaximizesprofitbyproducingthequantityatwhichmarginalrevenueequalsmarginalcost.•Itthenusesthedemandcurvetofindthepricethatwillinduceconsumerstobuythatquantity.Figure4ProfitMaximizationforaMonopolyCopyright©2004South-WesternQuantityQQ0CostsandRevenueDemandAveragetotalcostMarginalrevenueMarginalcostMonopolypriceQMAXB1.Theintersectionofthemarginal-revenuecurveandthemarginal-costcurvedeterminestheprofit-maximizingquantity...A2....andthenthedemandcurveshowsthepriceconsistentwiththisquantity.Copyright©2004South-WesternProfitMaximization•ComparingMonopolyandCompetition•Foracompetitivefirm,priceequalsmarginalcost.P=MR=MC•Foramonopolyfirm,priceexceedsmarginalcost.PMR=MCCopyright©2004South-WesternAMonopoly’sProfit•Profitequalstotalrevenueminustotalcosts.•Profit=TR-TC•Profit=(TR/Q-TC/Q)Q•Profit=(P-ATC)QFigure5TheMonopolist’sProfitCopyright©2004South-WesternMonopolyprofitAveragetotalcostQuantityMonopolypriceQMAX0CostsandRevenueDemandMarginalcostMarginalrevenueAveragetotalcostBCEDCopyright©2004South-WesternAMonopolist’sProfit•Themonopolistwillreceiveeconomicprofitsaslongaspriceisgreaterthanaveragetotalcost.Figure6TheMarketforDrugsCopyright©2004South-WesternQuantity0CostsandRevenueDemandMarginalrevenuePriceduringpatentlifeMonopolyquantityPriceafterpatentexpiresMarginalcostCompetitivequantityCopyright©2004South-WesternTHEWELFARECOSTOFMONOPOLY•Incontrasttoacompetitivefirm,themonopolychargesapriceabovethemarginalcost.•Fromthestandpointofconsumers,thishighpricemakesmonopolyundesirable.•However,fromthestandpointoftheownersofthefirm,thehighpricemakesmonopolyverydesirable.Figure7TheEfficientLevelofOutputCopyright©2004South-WesternQuantity0PriceDemand(valuetobuyers)MarginalcostValuetobuyersisgreaterthancosttoseller.Valuetobuyersislessthancosttoseller.CosttomonopolistCosttomonopolistValuetobuyersValuetobuyersEfficientquantityCopyright©2004South-WesternTheDeadweightLoss•Becauseamonopolysetsitspriceabovemarginalcost,itplacesawedgebetweentheconsumer’swillingnesstopayandtheproducer’scost.•Thiswedgecausesthequantitysoldtofallshortofthesocialoptimum.Figure8TheInefficiencyofMonopolyCopyright©2004South-WesternQuantit