第10章市场势力：垄断与买方垄断-课件.ppt

1、第10章市场势力市场势力:垄断与买方垄断垄断与买方垄断第第 10章章Slide 2本章要讨论的问题本章要讨论的问题垄断垄断势力垄断形成原因垄断的社会成本第第 10章章Slide 3本章要讨论的问题本章要讨论的问题买方垄断买方垄断势力限制市场势力:反垄断法第第 10章章Slide 4完全竞争完全竞争完全竞争回顾lP=LMC=LRACl长期内只存在正常利润或经济利润为零l大量生产者和消费者l同质化产品l充分信息l企业是价格的接受者完全竞争完全竞争QQPP市场市场单个企业单个企业DSQ0P0P0D=MR=Pq0LRACLMC第第 10章章Slide 6完全垄断完全垄断完全垄断1)一个生产者 许多消费

2、者2)一种产品(没有替代品)3)市场进入壁垒第第 10章章Slide 7完全垄断完全垄断完全垄断企业是市场供给方，对其产品的销售能够绝对控制。当边际收入等于边际成本时，利润达到最大。第第 10章章Slide 8完全垄断完全垄断确定边际收入l作为唯一的生产者,垄断企业面对整个市场l假定企业的需求为:uP=6-Q第第 10章章Slide 9总收入、边际收入及平均收入总收入、边际收入及平均收入$60$0-515$5$54283433913248-12155-31价格价格 数量数量 总收入总收入 边际收入边际收入 平均收入平均收入PQTRMRAR第第 10章章Slide 10平均收入和边际收入平均收入

3、和边际收入Q0123P12345674567平均收入平均收入(需求需求)边际收入边际收入第第 10章章Slide 11完全垄断完全垄断观察1)只有降价才能增加销售量2)MR MC).当产量高于 MR=MC 时，收入的增加小于成本的增加(MR MCl完全竞争P=MC第第 10章章Slide 22完全垄断完全垄断完全垄断与完全竞争的价格比较:l需求价格弹性越大，价格越接近于边际成本第第 10章章Slide 23完全垄断完全垄断需求变化l在完全竞争市场中,市场供给曲线由边际成本决定；l对于完全垄断企业,产量由边际成本和需求曲线共同决定；第第 10章章Slide 24D2MR2D1MR1需求变动导致价

4、格变动但产量不变需求变动导致价格变动但产量不变QMCPP2P1Q1=Q2第第 10章章Slide 25D1MR1需求变动导致产量变动但价格不变需求变动导致产量变动但价格不变MCPMR2D2P1=P2Q1Q2Q第第 10章章Slide 26完全垄断完全垄断观察l需求变化通常导致价格及需求量都发生变化；l完全垄断市场没有供给曲线；第第 10章章Slide 27完全垄断完全垄断观察l在相同价格水平下，完全垄断企业可能生产不同数量的产品；l在不同价格水平下，完全垄断企业可能生产相同数量的产品；第第 10章章Slide 28MonopolyThe Effect of a TaxlUnder monopo

5、ly price can sometimes rise by more than the amount of the tax.To determine the impact of a tax:lt=specific taxlMC=MC+tlMR=MC+t:optimal production decision第第 10章章Slide 29Effect of Excise Tax on MonopolistQuantity$/QMCD=ARMRQ0P0MC+taxtQ1P1PIncrease in P:P0P1 increase in tax第第 10章章Slide 30QuestionlSup

6、pose:Ed=-2lHow much would the price change?Effect of Excise Tax on Monopolist第第 10章章Slide 31AnswerWhat would happen to profits?tax.theby twice increases Price22)(2 toincreases If22If11tMCtMCPtMCMCMCPEEMCPddEffect of Excise Tax on Monopolist第第 10章章Slide 32MonopolyThe Multiplant FirmlFor many firms,pr

7、oduction takes place in two or more different plants whose operating cost can differ.第第 10章章Slide 33MonopolyThe Multiplant FirmlChoosing total output and the output for each plant:uThe marginal cost in each plant should be equal.uThe marginal cost should equal the marginal revenue for each plant.第第

8、10章章Slide 34MonopolyAlgebraically:212211Output Total2Plant for Cost&Output&1Plant for Cost&Output&QQQCQCQTThe Multiplant Firm第第 10章章Slide 35MonopolyAlgebraically:0)()()(11112211QCQPQQQCQCPQTTThe Multiplant Firm第第 10章章Slide 36MonopolyAlgebraically:11110)()()(MCMRQCMCQPQMRTThe Multiplant Firm第第 10章章Sl

9、ide 37MonopolyAlgebraically:2121MCMCMRMCMRMCMR第第 10章章Slide 38Production with Two PlantsQuantity$/QD=ARMRMC1MC2MCTMR*Q1Q2Q3P*第第 10章章Slide 39Production with Two PlantsObservations:1)MCT=MC1+MC22)Profit maximizing output:uMCT=MR at QT and P*uMR=MR*uMR*=MC1 at Q1,MC*=MC2 at Q2uMC1+MC2=MCT,Q1+Q2=QT,and M

10、R=MC1+MC2 Quantity$/QD=ARMRMC1MC2MCTMR*Q1Q2Q3P*第第 10章章Slide 40Monopoly PowerMonopoly is rare.However,a market with several firms,each facing a downward sloping demand curve will produce so that price exceeds marginal cost.第第 10章章Slide 41Monopoly PowerScenario:lFour firms with equal share(5,000)of a

11、market for 20,000 toothbrushes at a price of$1.50.Quantity10,0002.00QA$/Q$/Q1.501.0020,00030,0003,0005,0007,0002.001.501.001.401.60At a market priceof$1.50,elasticity ofdemand is-1.5.Market DemandThe Demand for ToothbrushesThe demand curve for Firm Adepends on how muchtheir product differs,andhow th

12、e firms compete.At a market priceof$1.50,elasticity ofdemand is-1.5.Quantity10,0002.00QA$/Q$/Q1.501.0020,00030,0003,0005,0007,0002.001.501.001.401.60DAMRAMarket DemandFirm A sees a much more elastic demand curve due tocompetition-Ed=-.6.StillFirm A has some monopoly power and charges a pricewhich ex

13、ceeds MC.MCAThe Demand for Toothbrushes第第 10章章Slide 44Monopoly PowerMeasuring Monopoly PowerlIn perfect competition:P=MR=MClMonopoly power:P MC第第 10章章Slide 45Monopoly PowerLerners Index of Monopoly PowerlL=(P-MC)/PuThe larger the value of L(between 0 and 1)the greater the monopoly power.lL is expres

14、sed in terms of EduL=(P-MC)/P=-1/EduEd is elasticity of demand for a firm,not the market第第 10章章Slide 46Monopoly PowerMonopoly power does not guarantee profits.Profit depends on average cost relative to price.Question:lCan you identify any difficulties in using the Lerner Index(L)for public policy?第第

15、 10章章Slide 47Monopoly PowerThe Rule of Thumb for PricinglPricing for any firm with monopoly power uIf Ed is large,markup is smalluIf Ed is small,markup is largedEMCP11Elasticity of Demand and Price Markup$/Q$/QQuantityQuantityARMRMRARMCMCQ*Q*P*P*P*-MCThe more elastic isdemand,the less themarkup.第第 1

16、0章章Slide 49Markup Pricing:Supermarkets to Designer JeansSupermarketsMC.above 11%-10 about set Prices stores individual for 3.product Similar 2.firms Several 1.5)(11.19.01.11.410MCMCMCPEd第第 10章章Slide 50Convenience StoresMC.above 25%about set Prices 3.them atesdifferenti eConvenienc 2.tssupermarke tha

17、n prices Higher 1.5)(25.18.0511.45MCMCMCPEdMarkup Pricing:Supermarkets to Designer Jeans第第 10章章Slide 51Convenience stores have more monopoly power.Question:lDo convenience stores have higher profits than supermarkets?Markup Pricing:Supermarkets to Designer JeansConvenience Stores第第 10章章Slide 52lDesi

18、gner jeansEd =-3 to-4uPrice 33-50%MCuMC=$12-$18/pairuWholesale price=$18-$27Markup Pricing:Supermarkets to Designer JeansDesigner JeansThe Pricing ofPrerecorded Videocassettes19851999TitleRetail Price($)TitleRetail Price($)Purple Rain$29.98Austin Powers$10.49Raiders of the Lost Ark24.95A Bugs Life17

19、.99Jane Fonda Workout59.95Theres Something about Mary13.99The Empire Strikes Back79.98Tae-Bo Workout24.47An Officer and a Gentleman24.95Lethal Weapon 416.99Star Trek:The Motion Picture 24.95Men in Black12.99Star Wars39.98Armageddon15.86What Do You Think?lShould producers lower the price of videocass

20、ettes to increase sales and revenue?The Pricing ofPrerecorded Videocassettes第第 10章章Slide 55Sources of Monopoly PowerWhy do some firms have considerable monopoly power,and others have little or none?A firms monopoly power is determined by the firms elasticity of demand.第第 10章章Slide 56Sources of Monop

21、oly PowerThe firms elasticity of demand is determined by:1)Elasticity of market demand2)Number of firms3)The interaction among firms第第 10章章Slide 57The Social Costs of Monopoly PowerMonopoly power results in higher prices and lower quantities.However,does monopoly power make consumers and producers i

22、n the aggregate better or worse off?第第 10章章Slide 58BALost Consumer SurplusDeadweight LossBecause of the higherprice,consumers loseA+B and producer gains A-C.CDeadweight Loss from Monopoly PowerQuantityARMRMCQCPCPmQm$/Q第第 10章章Slide 59Rent SeekinglFirms may spend to gain monopoly poweruLobbyinguAdvert

23、isinguBuilding excess capacityThe Social Costs of Monopoly Power第第 10章章Slide 60The incentive to engage in monopoly practices is determined by the profit to be gained.The larger the transfer from consumers to the firm,the larger the social cost of monopoly.The Social Costs of Monopoly Power第第 10章章Sli

24、de 61Examplel1996 Archer Daniels Midland(ADM)successfully lobbied for regulations requiring ethanol be produced from cornQuestionlWhy only corn?The Social Costs of Monopoly Power第第 10章章Slide 62Price RegulationlRecall that in competitive markets,price regulation created a deadweight loss.Question:lWh

25、at about a monopoly?The Social Costs of Monopoly Power第第 10章章Slide 63ARMRMCPmQmACP1Q1Marginal revenue curvewhen price is regulatedto be no higher that P1.If left alone,a monopolistproduces Qm and charges Pm.If price is lowered to P3 outputdecreases and a shortage exists.For output levels above Q1,th

26、e original average andmarginal revenue curves apply.If price is lowered to PC outputincreases to its maximum QC andthere is no deadweight loss.Price Regulation$/QQuantityP2=PCQcP3Q3Q3Any price below P4 resultsin the firm incurring a loss.P4第第 10章章Slide 64Natural MonopolylA firm that can produce the

27、entire output of an industry at a cost lower than what it would be if there were several firms.The Social Costs of Monopoly Power第第 10章章Slide 65Regulating the Priceof a Natural Monopoly$/QNatural monopolies occurbecause of extensive economies of scaleQuantity第第 10章章Slide 66MCACARMR$/QQuantitySetting

28、 the price at Pr yields the largest possibleoutput;excess profit is zero.QrPrPCQCIf the price were regulate to be PC,the firm would lose moneyand go out of business.PmQmUnregulated,the monopolistwould produce Qm and charge Pm.Regulating the Priceof a Natural Monopoly第第 10章章Slide 67Regulation in Prac

29、ticelIt is very difficult to estimate the firms cost and demand functions because they change with evolving market conditionsThe Social Costs of Monopoly Power第第 10章章Slide 68Regulation in PracticelAn alternative pricing technique-rate-of-return regulation allows the firms to set a maximum price base

30、d on the expected rate or return that the firm will earn.uP=AVC+(D+T+sK)/Q,wherelP=price,AVC=average variable costlD=depreciation,T=taxesls=allowed rate of return,K=firms capital stockThe Social Costs of Monopoly Power第第 10章章Slide 69Regulation in PracticelUsing this technique requires hearings to ar

31、rive at the respective figures.lThe hearing process creates a regulatory lag that may benefit producers(1950s&60s)or consumers(1970s&80s).QuestionlWho is benefiting in the 1990s?The Social Costs of Monopoly Power第第 10章章Slide 70MonopsonyA monopsony is a market in which there is a single buyer.An olig

32、opsony is a market with only a few buyers.Monopsony power is the ability of the buyer to affect the price of the good and pay less than the price that would exist in a competitive market.第第 10章章Slide 71MonopsonyCompetitive BuyerlPrice takerlP=Marginal expenditure=Average expenditurelD=Marginal value

33、Competitive BuyerCompared to Competitive SellerQuantityQuantity$/Q$/QAR=MRD=MVME=AEP*Q*ME=MV at Q*ME=P*P*=MVP*Q*MCMR=MCP*=MRP*=MCBuyerSeller第第 10章章Slide 73MES=AEThe market supply curve is the monopsonistsaverage expenditure curveMonopsonist BuyerQuantity$/QMVQ*mP*mMonopsonyME P&above SPCQCCompetitiv

34、eP=PCQ=Q+C第第 10章章Slide 74Monopoly and MonopsonyQuantityARMRMC$/QQCPCMonopolyNote:MR=MC;AR MC;P MCP*Q*第第 10章章Slide 75Monopoly and MonopsonyQuantity$/QMVMES=AEQ*P*PCQCMonopsonyNote:ME=MV;ME AE;MV P第第 10章章Slide 76Monopoly and MonopsonyMonopolylMR MClQm PCMonopsonylME PlP MVlQm QClPm PC第第 10章章Slide 77Mo

35、nopsony PowerA few buyers can influence price(e.g.automobile industry).Monopsony power gives them the ability to pay a price that is less than marginal value.第第 10章章Slide 78Monopsony PowerThe degree of monopsony power depends on three similar factors.1)Elasticity of market supplyuThe less elastic th

36、e market supply,the greater the monopsony power.第第 10章章Slide 79Monopsony PowerThe degree of monopsony power depends on three similar factors.2)Number of buyersuThe fewer the number of buyers,the less elastic the supply and the greater the monopsony power.第第 10章章Slide 80Monopsony PowerThe degree of m

37、onopsony power depends on three similar factors.3)Interaction Among BuyersuThe less the buyers compete,the greater the monopsony power.MES=AEMES=AEMonopsony Power:Elastic versus Inelastic SupplyQuantityQuantity$/Q$/QMVMVQ*P*MV-P*P*Q*MV-P*第第 10章章Slide 82ADeadweight Loss fromMonopsony PowerDetermining

38、 the deadweight loss in monopsonylChange in sellers surplus =-A-ClChange in buyers surplus=A-BlChange in welfare=-A-C+A-B=-C-BlInefficiency occurs because less is purchasedQuantity$/QMVMES=AEQ*P*PCQCBCDeadweight Loss第第 10章章Slide 83Monopsony PowerBilateral MonopolylBilateral monopoly is rare,however,

39、markets with a small number of sellers with monopoly power selling to a market with few buyers with monopsony power is more common.The Social Costs of Monopsony Power第第 10章章Slide 84Monopsony PowerQuestionlIn this case,what is likely to happen to price?The Social Costs of Monopsony Power第第 10章章Slide

40、85Limiting Market Power:The Antitrust LawsAntitrust Laws:lPromote a competitive economylRules and regulations designed to promote a competitive economy by:uProhibiting actions that restrain or are likely to restrain competitionuRestricting the forms of market structures that are allowable第第 10章章Slid

41、e 86Sherman Act(1890)lSection 1uProhibits contracts,combinations,or conspiracies in restraint of tradelExplicit agreement to restrict output or fix priceslImplicit collusion through parallel conductLimiting Market Power:The Antitrust Laws第第 10章章Slide 871983 lSix companies and six executives indicted

42、 for price of copper tubing1996lArcher Daniels Midland(ADM)pleaded guilty to price fixing for lysine-three sentenced to prison in 1999Limiting Market Power:The Antitrust LawsExamples of Illegal Combinations第第 10章章Slide 881999lRoche A.G.,BASF A.G.,Rhone-Poulenc and Takeda pleaded guilty to price fixi

43、ng of vitamins-fined more than$1 billion.Limiting Market Power:The Antitrust LawsExamples of Illegal Combinations第第 10章章Slide 89Sherman Act(1890)lSection 2uMakes it illegal to monopolize or attempt to monopolize a market and prohibits conspiracies that result in monopolization.Limiting Market Power:

44、The Antitrust Laws第第 10章章Slide 90Clayton Act(1914)1)Makes it unlawful to require a buyer or lessor not to buy from a competitor2)Prohibits predatory pricingLimiting Market Power:The Antitrust Laws第第 10章章Slide 91Clayton Act(1914)3)Prohibits mergers and acquisitions if they“substantially lessen compet

45、ition”or“tend to create a monopoly”Limiting Market Power:The Antitrust Laws第第 10章章Slide 92Robinson-Patman Act(1936)lProhibits price discrimination if it is likely to injure the competitionLimiting Market Power:The Antitrust Laws第第 10章章Slide 93Federal Trade Commission Act(1914,amended 1938,1973,1975)

46、1)Created the Federal Trade Commission(FTC)2)Prohibitions against deceptive advertising,labeling,agreements with retailer to exclude competing brandsLimiting Market Power:The Antitrust Laws第第 10章章Slide 94Antitrust laws are enforced three ways:1)Antitrust Division of the Department of JusticeuA part

47、of the executive branch-the administration can influence enforcementuFines levied on businesses;fines and imprisonment levied on individualsLimiting Market Power:The Antitrust Laws第第 10章章Slide 95Antitrust laws are enforced three ways:2)Federal Trade CommissionuEnforces through voluntary understandin

48、g or formal commission orderLimiting Market Power:The Antitrust Laws第第 10章章Slide 96Antitrust laws are enforced three ways:3)Private ProceedingsuLawsuits for damagesuPlaintiff can receive treble damagesLimiting Market Power:The Antitrust Laws第第 10章章Slide 97Two ExampleslAmerican Airlines-Price fixingl

49、MicrosoftuMonopoly poweruPredatory actionsuCollusionLimiting Market Power:The Antitrust Laws第第 10章章Slide 98SummaryMarket power is the ability of sellers or buyers to affect the price of a good.Market power can be in two forms:monopoly power and monopsony power.第第 10章章Slide 99SummaryMonopoly power is

50、 determined in part by the number of firms competing in the market.Monopsony power is determined in part by the number of buyers in the market.第第 10章章Slide 100SummaryMarket power can impose costs on society.Sometimes,scale economies make pure monopoly desirable.We rely on the antitrust laws to preve