1 / 39

Ch 9

Ch 9. Perfect Competition. Characteristics. Fragmented Undifferentiated products Perfect information about prices equal Access to resources. Implications. Price taker Law of one price Zero-profit in the long run. Economic Profit. Economic profit vs account profit.

lane
Download Presentation

Ch 9

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ch 9 • Perfect Competition

  2. Characteristics • Fragmented • Undifferentiated products • Perfect information about prices • equal Access to resources

  3. Implications • Price taker • Law of one price • Zero-profit in the long run

  4. Economic Profit • Economic profit vs account profit

  5. (Figure continues on next slide) Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-01 FIGURE 9-1 Profit Maximization by a Price-Taking Firm

  6. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-01 continued FIGURE 9-1 (Continued)

  7. Costs

  8. Supply curve

  9. When fixed costs are all sunk

  10. Whose fixed costs are all sunk : P=0.05 q=25, loss=TFC+(avc25-P)25 ;q=0,;loss=TFC FIGURE 9-2 Short-Run Supply Curve for a Price-Taking Firm

  11. FIGURE 9-3 Short-Run Supply Curve for a Firm with Nonsunk Fixed Costs P=0.15,q=35, 則loss=TFC+35(ansc35-0.15) q=0,loss=TFC

  12. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-04 FIGURE 9-4 Supply Curve for Learning-By-Doing Exercise 9.2

  13. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-05 FIGURE 9-5 Supply Curve for a U.S. Corn Farmer

  14. SHORT-TUN MARKET SUPPLY CURVE

  15. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-06 FIGURE 9-6 Short-Run Market Supply Curve

  16. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-07 FIGURE 9-7 Supply Curves for Copper in 2000

  17. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-08 FIGURE 9-8 Perfectly Inelastic and Perfectly Elastic Supply Curves

  18. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-09 FIGURE 9-9 Short-Run Equilibrium

  19. Comparative Static

  20. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-10 FIGURE 9-10 Comparative Statics Analysis: Increase in the Number of Firms

  21. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-11 FIGURE 9-11 The Impact of a Shift in Demand on Price Depends on the Price Elasticity of Supply

  22. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-12 FIGURE 9-12 The Short-Run Supply Curve for Roses

  23. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-13 FIGURE 9-13 The Price of Electricity in the Nord Pool, 1999

  24. Long-run output and plant-size adjustments

  25. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-14 FIGURE 9-14 Long-Run Output and Plant Size Adjustment by a Price-Taking Firm

  26. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-15 FIGURE 9-15 The Firm’s Long-Run Supply Curve

  27. Free entry and long-run equilibrium

  28. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-16 FIGURE 9-16 Long-Run Equilibrium in a Perfectly Competitive Market

  29. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-17 FIGURE 9-17 Relationship Between Number of Internet Service Providers and the Size of the Market in 1998

  30. Long-run market supply curves • Input prices changes

  31. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-18 FIGURE 9-18 Long-Run Industry Supply Curve

  32. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-19 FIGURE 9-19 Spot Price to Charter a Supertanker, January 1973-March 1976

  33. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-20 FIGURE 9-20 The Collapse of the Oil Tanker Market, 1973–1975

  34. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-21 FIGURE 9-21 Long-Run Industry Supply Curve in an Increasing-Cost Industry

  35. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-22 FIGURE 9-22 Economic Rent

  36. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-23 FIGURE 9-23 Producer Surplus for a Price-Taking Firm

  37. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-24 FIGURE 9-24 Market-Level Producer Surplus: Number of Firms in the Industry is Fixed

  38. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-25 FIGURE 9-25 Producer Surplus in the World Copper Market

  39. Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-26 FIGURE 9-26 Producer Surplus at the Long-Run Equilibrium in an Increasing-Cost Industry

More Related