Chapter twenty-Four Monopoly 垄断
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
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
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
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
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?
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
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
y $ R(y) = p(y)y Profit-Maximization
Profit-Maximization ROy=ply)y cly y
$ R(y) = p(y)y c(y) Profit-Maximization y
Profit-Maximization ROy=ply)y cly y Ily)
Profit-Maximization $ R(y) = p(y)y c(y) y (y)