北京大学：《中级微观经济学》课程教学资源（英文讲稿）03 Monopoly：Market Power、Monopolistic Competition（垄断竞争市场）、Oligopoly（寡头市场）、Game Theory

Chapter Six Monopoly Market power 垄断:市场力 公北家 2005M00

1 Chapter Six Monopoly : Market Power 垄断：市场力 © 2005 MOL

Chapter 6 includes 6. 1 Profit Max, and Pricing Decision In Monopoly 6.2 Monopoly and resource Allocation 6.3 Price discrimination(价格歧 视)

2 Chapter 6 includes: „ 6.1 Profit Max. and Pricing Decision In Monopoly „ 6.2 Monopoly and Resource Allocation „ 6.3 Price Discrimination(价格歧 视 )

Overview of last week class Perfectly Competitive markets Choosing Output in the short-Run The Competitive Firm's Short-Run Supply curve Choosing Output in the Long-Run The Industry's Long-Run Supply curve Evaluating the Gains and Losses from Government Policies--Consumer and Producer Surplus The efficiency of a competitive market

3 Overview of Last Week Class „ Perfectly Competitive Markets „ Choosing Output in the Short-Run „ The Competitive Firm’s Short-Run Supply Curve „ Choosing Output in the Long-Run „ The Industry’s Long-Run Supply Curve „ Evaluating the Gains and Losses from Government Policies--Consumer and Producer Surplus „ The Efficiency of a Competitive Market

Outline of Today's Class Definition of monopoly a What cause Monopoly? Profit Max. and Pricing Decision in Monopoly There is No monopoly Supply curve Markup pricing and Monopoly power The inefficiency of monopol

4 Outline of Today’s Class „ Definition of Monopoly „ What cause Monopoly? „ Profit Max. and Pricing Decision in Monopoly „ There is No Monopoly Supply Curve „ Markup Pricing and Monopoly Power „ The Inefficiency of Monopoly

Readings about the part of this chapter a Zhang Chapter 10, P304-333 Nicholson Chapter 18, P495-524

5 Readings about the part of this chapter „ Zhang: Chapter 10,P304-333 „ Nicholson: Chapter 18, P495-524

Review, Perfect Competition Large number of buyers and sellers ■ Homogenous product a Free Entry and Exit Perfect information So Firm is a price taker a When the optimal output in the Long Run P= LMC= LAC=SAC=SMC=AR a Normal profits or zero economic profits in the long run

6 Review: Perfect Competition „ Large number of buyers and sellers „ Homogenous product „ Free Entry and Exit „ Perfect information „ So Firm is a price taker „ When the Optimal Output in the Long Run „ P = LMC = LAC=SAC=SMC=AR „ Normal profits or zero economic profits in the long run

Review: Perfect Competition Market Individual firm LMC LAC dE mr= p Q 0

Review: Perfect Competition Q q P P Market Individual Firm D S Q 0 P 0 P 0 d = MR = P q 0 LMC LAC

What is Monopoly(垄断) A Monopoly is a single supplier to a market This firm may choose produce at any point on the market demand curve price-maker Characteristics of Monopoly 1)One seller-many buyers 2)One product no good substitutes) 3) Barriers to entry(进入壁垒)

8 What is Monopoly (垄断 ) „ A Monopoly is a single supplier to a market. This firm may choose produce at any point on the market demand curve. Price-maker. „ Characteristics of Monopoly 1) One seller - many buyers 2) One product (no good substitutes) 3) Barriers to entry(进入壁垒 )

What causes monopolies? egal restrictions((法律限制)- copyrights& patents Control of critical resources(主要资源的控制) creates market power Government- authorized franchises(政府授予的 特权), such as provided to cable tv companies a Economies of size-Natural monopoly allow larger firms to produce at lower cost than smaller firms Such as railway, public goods Brand loyalty(对品牌忠诚) and extensive advertising makes entry highly expensive

9 What causes monopolies? „ Legal restrictions (法律限制 ) -- copyrights & patents. „ Control of critical resources（主要资源的控制） creates market power. „ Government-authoriz ed franchises（政府授予的 特权）, such as provided to cable TV companies. „ Economies of size —Natural Monopoly allow larger firms to produce at lower cost than smaller firms. Such as railway, public goods „ Brand loyalty （对品牌忠诚 ） and extensive advertising m akes entry highly expensive

Profit-Maximization in a Monopoly Suppose that a monopolist seeks to maximize its economic profit, Mar.I(q=p(ag-c(q) q>0 What output level q* maximizes profit? 10

10 Profit-Maximization in a Monopoly „ Suppose that a monopolist seeks to maximize its economic profit, „ What output level q* maximizes profit? 0 . ( ) ( ) ( ). q Max q p q q c q > Π = −