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imperfect competition
between mono and perfect compe; oligo / mono compe
concentration ratio
tính bằng phần trăm top 4 cty
As a group, oligopolists would always be better off if they would act collectively
as a mono
When oligo act as a group, they will produce…
produce small quantity, p > MC
for oligo to make highest profit
price = mono, outcome = mono
OPEC
group control oil production; cartel
Antitrust laws
prevent oligopolists from acting in ways that make markets less competitive
with a math that oligo dont collude,…
increase production until they dont have profit
oligo dont collude, they will have 2 effect
output: p>MC so sell 1 more unit will increase profit
price: increase production => increase total sold => decrease price and profit
oligo provide reason that free trade benefit all, because…
increase firms, price falls
increased competition => smaller DWL
differences between mono and perfect compe:
mono: downward demand curve; have differentiated products; p= ATC > MC=MR long run; Q not at min ATC; excess capacity in long run
perfect: horizontal demand curve; identical products; p=ATC=MC=MR long run; Q at min ATC; efficient scale in long run
Long run mono compe?
p = ATC
short run mono panel?
ATC có thể =,>,<price
source of inefficiency
new entry:
Business-stealing externality (existing firms lose cus and p)
Product-variety externality
•Resale price maintenance (fair trade)
prevent competing on price (limit bundle, discounts…
Predatory pricing
charge too low price
=> anticompetitive, drive some firm out of market
Tying
Offer two goods together at a single price => Expand market power
Skeptics: Cannot increase market power by binding two goods together
Form of price discrimination: Tying may increase profit
Your travel agent provides a list of several hundred local hotels, and a Sheraton. In this case, the Sheraton brand-name is likely to be used as a signal of
quality when quality cannot be easily judged
A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which
brand name identity can be detrimental to the profitability of a firm
tốn nhiều x để đổi lấy y
receive higher marginal utility from y than x
để nâng indifference curve cao hơn (đã có optimun ở dưới)
price x/y giảm
income tăng
effect of change in price lead to
subs effect: ở 1 điểm khác trên cùng indifference curve
income effect: shift sang curve cao hơn
có income cao, đã có optimum, giá y đột nhiên giảm
giống income effect, Qx giữ nguyên, Qy tăng, shift sang curve cao hơn
slope của budget và indiff xác định bằng
budget = relative price
indiff = MRS