14-Monopoly-and-Antitrust-Policy-管理經(jīng)濟(jì)學(xué)-教學(xué)課件

MonopolyandAntitrustPolicyInthischapter,wewilldevelopaneconomicmodelofmonopoliesthatcanhelpustoanalyzetheireffectsontheeconomy.Afterstudyingthischapter,youshouldbeableto:Definemonopoly.Explainthefourmainreasonsmonopoliesarise.Explainhowamonopolychoosespriceandoutput.Useagraphtoillustratehowmonopolyaffectseconomicsurplus.Discussgovernmentpoliciestowardmonopoly.TimeWarnerRulesManhattanLEARNINGOBJECTIVES123452WhereDoMonopoliesComeFrom?LEARNINGOBJECTIVE2Barrierstoentrymaybehighenoughtokeepoutcompetingfirmsforfourmainreasons:Governmentblockstheentryofmorethanonefirmintoamarket.Onefirmhascontrolofakeyrawmaterialnecessarytoproduceagood.Thereareimportantnetworkexternalitiesinsupplyingthegoodorservice.Economiesofscalearesolargethatonefirmhasanaturalmonopoly.5WhereDoMonopoliesComeFrom?EntryBlockedbyGovernmentActionBygrantingapatentorcopyrighttoanindividualorfirm,whichgivesittheexclusiverighttoproduceaproduct.Bygrantingafirmapublicfranchise,whichmakesittheexclusivelegalproviderofagoodorservice.6TheEndoftheChristmasPlantMonopoly14-2Atonetime,theEckefamilyhadamonopolyongrowingpoinsettias,butmanynewfirmsenteredtheindustry.7WhereDoMonopoliesComeFrom?PATENTSANDCOPYRIGHTS PatentTheexclusiverighttoaproductforaperiodof20yearsfromthedatetheproductwasinvented. CopyrightThelegalrightofthecreatorofabook,film,orpieceofmusictoexclusiverighttothecreation.PUBLICFRANCHISES

PublicfranchiseAdesignationbythegovernmentthatafirmistheonlylegalproviderofagoodorservice.CONTROLOFAKEYRESOURCE

Anotherwayforafirmtobecomeamonopolyisbycontrollingakeyresource.Thishappensinfrequentlybecausemostresourcesarewidelyavailablefromavarietyofsuppliers.8AreDiamond(Profits)Forever?

TheDeBeersDiamondMonopoly14-3DeBeerspromotedthesentimentalvalueofdiamondsasawaytomaintainitspositioninthediamondmarket.9WhereDoMonopoliesComeFrom?NetworkExternalities NetworkexternalitiesExistwhentheusefulnessofaproductincreaseswiththenumberofconsumerswhouseit.10WhereDoMonopoliesComeFrom?NaturalMonopoly

NaturalmonopolyAsituationinwhicheconomiesofscalearesolargethatonefirmcansupplytheentiremarketataloweraveragetotalcostthancantwoormorefirms.14-1AverageTotalCostCurveforaNaturalMonopoly11

Isthe“ProxyBusiness”aNaturalMonopoly?14-1LEARNINGOBJECTIVE212HowDoesaMonopolyChoosePriceandOutput?LEARNINGOBJECTIVE3MarginalRevenueOnceAgainRememberthatwhenafirmcutsthepriceofaproduct,onegoodthingandonebadthinghappens:Thegoodthing:Itsellsmoreunitsoftheproduct.Thebadthing:Itreceiveslessrevenuefromeachunitthanitwouldhavereceivedatthehigherprice.13HowDoesaMonopolyChoosePriceandOutput?MarginalRevenueOnceAgain14-2CalculatingaMonopoly’sRevenue14HowDoesaMonopolyChoosePriceandOutput?ProfitMaximizationForaMonopolist14-3Profit-MaximizingPriceandOutputforaMonopoly15

FindingProfitMaximizingPriceandOutputforaMonopolist14-2LEARNINGOBJECTIVE3PRICEQUANTITYTOTALREVENUEMARGINALREVENUE(MR=ΔTR/ΔQ)TOTALCOSTMARGINAL

COST(MC=ΔTC/ΔQ)$173$51–$56–$16464$1363$7$1557511718$146849809$1379179010$12896510111Don’tAssumeThatChargingaHigherPriceIsAlwaysMoreProfitableForaMonopolist16DoesMonopolyReduceEconomicEfficiency?LEARNINGOBJECTIVE4ComparingMonopolyandCompetition14-4WhatHappensIfaPerfectlyCompetitiveIndustryBecomesaMonopoly?17DoesMonopolyReduceEconomicEfficiency?MeasuringtheEfficiencyLossesfromMonopoly14-5TheInefficiencyofMonopolyWecansummarizetheeffectsofmonopolyasfollows:Monopolycausesareductioninconsumersurplus.Monopolycausesanincreaseinproducersurplus.Monopolycausesadeadweightloss,whichrepresentsareductionineconomicefficiency.18DoesMonopolyReduceEconomicEfficiency?HowLargeAretheEfficiencyLossesDuetoMonopoly? MarketpowerTheabilityofafirmtochargeapricegreaterthanmarginalcost.MarketPowerandTechnologicalChange Theintroductionofnewproductsrequiresfirmstospendfundsonresearchanddevelopment.Becausefirmswithmarketpoweraremorelikelytoearneconomicprofits,theyarealsomorelikelytointroducenewproducts.19GovernmentPolicytowardMonopolyLEARNINGOBJECTIVE5 CollusionAnagreementamongfirmstochargethesameprice,ortootherwisenotcompete.AntitrustLawsandAntitrustEnforcement AntitrustlawsLawsaimedateliminatingcollusionandpromotingcompetitionamongfirms.20GovernmentPolicytowardMonopolyLAWDATEPURPOSEShermanAct1890Prohibited“restraintoftrade,”includingpricefixingandcollusion.Alsooutlawedmonopolization.ClaytonAct1914Prohibitedfirmsfrombuyingstockincompetitorsandfromhavingdirectorsserveontheboardsofcompetingfirms.FederalTradeCommissionAct1914EstablishedtheFederalTradeCommission(FTC)tohelpadministerantitrustlaws.Robinson-PatmanAct1936Prohibitedchargingbuyersdifferentpricesiftheresultwouldreducecompetition.Cellar-KefauverAct1950Toughenedrestrictionsonmergersbyprohibitinganymergersthatwouldreducecompetition.AntitrustLawsandAntitrustEnforcementImportantU.S.AntitrustLaws14–121GovernmentPolicytowardMonopolyMergers:TheTrade-offbetweenMarketPowerandEfficiencyHorizontalmergersMergersbetweenfirmsinthesameindustry.VerticalmergersMergersbetweenfirmsatdifferentstagesofproductionofagood.22GovernmentPolicytowardMonopolyMergers:TheTrade-OffbetweenMarketPowerandEfficiency14-6AMergerThatMakesConsumersBetterOff23GovernmentPolicytowardMonopolyTheDepartmentofJusticeandtheFederalTradeCommissionMergerGuidelinesMarketdefinitionMeasureofconcentrationMergerstandards24GovernmentPolicytowardMonopolyTheDepartmentofJusticeandtheFederalTradeCommissionMergerGuidelinesMEASUREOFCONCENTRATION1firm,100%marketshare(amonopoly):HHI=1002=10,0002firms,eachwitha50%marketshare:HHI=502+502=5,0004firms,withmarketsharesof30%,30%,20%,and20%:

HHI=302+302+202+202=2,60010firms,eachwithmarketsharesof10%:HHI=10(102)=1,00025GovernmentPolicytowardMonopolyTheDepartmentofJusticeandtheFederalTradeCommissionMergerGuidelinesMERGERSTANDARDSPost-MergerHHIBelow1,000.Thesemarketsarenotconcentrated,somergersinthemarenotchallenged.Post-MergerHHIBetween1,000and1,800.Thesemarketsaremoderatelyconcentrated.MergersthatraisetheHHIby