北京大学：《中级微观经济学》课程教学资源（PPT课件讲稿，英文版）Chapter Twenty-Four 垄断 Monopoly

Chapter twenty-Four Monopoly 垄断

1 Chapter Twenty-Four Monopoly 垄断

Structure What causes monopoly Profit-maximizing choices of monopoly Markup pricing Taxing a monopoly Inefficiency of monopoly Natural monopoly(自然垄断

2 Structure What causes monopoly Profit-maximizing choices of monopoly Markup pricing Taxing a monopoly Inefficiency of monopoly Natural monopoly (自然垄断)

Pure Monopoly A monopolized market has a single seller The monopolist's demand curve is the(downward sloping) market demand curve So the monopolist can alter the market price by adjusting its output level

3 Pure Monopoly A monopolized market has a single seller. The monopolist’s demand curve is the (downward sloping) market demand curve. So the monopolist can alter the market price by adjusting its output level

Pure Monopoly Output unit ply) Higher output y causes a lower market price, p(y) Output Level, y

4 Pure Monopoly Output Level, y $/output unit p(y) Higher output y causes a lower market price, p(y)

What causes monopolies? A legal fiat; e.g. US Postal Service A patent; e.g. a new drug Sole ownership of a resource; e.g. a toll highway Formation of a cartel; e.g. OPEC Large economies of scale; e.g. local utility companies

5 What causes monopolies? A legal fiat; e.g. US Postal Service A patent; e.g. a new drug Sole ownership of a resource; e.g. a toll highway Formation of a cartel; e.g. OPEC Large economies of scale; e.g. local utility companies

Pure Monopoly Suppose that the monopolist seeks to maximize its economic profit, II(y=p(yy-c(y). What output level y* maximizes profit?

6 Pure Monopoly Suppose that the monopolist seeks to maximize its economic profit, What output level y* maximizes profit? (y) = p(y)y − c(y)

Profit-Maximization II(y=p(yy-c(y) At the profit-maximizing output level y dyq(p(y)y、dcy dIi(y) d 0 dy So, for y=y", dy (p(yy)=dc(y) d d

7 Profit-Maximization (y) = p(y)y − c(y). At the profit-maximizing output level y* ( ) d y dy d dy p y y dc y dy ( ) ( ) ( ) = − = 0 so, for y = y*, ( ) d dy p y y dc y dy ( ) ( ) =

Profit-Maximization ROy=ply)y y

8 y $ R(y) = p(y)y Profit-Maximization

Profit-Maximization ROy=ply)y cly y

9 $ R(y) = p(y)y c(y) Profit-Maximization y

Profit-Maximization ROy=ply)y cly y IIly)

10 Profit-Maximization $ R(y) = p(y)y c(y) y (y)