(微观经济学英文ppt课件)Chap14-Firms-in-Competitive-Markets

Click to edit Master title style,Click to edit Master text styles,Second Level,Third Level,Fourth Level,Fifth Level,Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.,(微观经济学英文课件）Chap14 Firms in Competitive Markets,A,market,is a group of buyers and sellers of a particular good or service.,4 types of,market?,perfectly competitive market,(,Perfect Competition,),Monopoly,Oligopoly,Monopolistic Competition,Markets,perfectly competitive market,characteristics,:,many,buyers and,sellers . They have a negligible impact on the market price.,The goods,are,largely the same.,Firms can freely enter or exit the,market.,a competitive firm is a,price taker,Unit 1 Revenue of a Competitive Firm,Unit 2 The Firms Short-Run Decision,Unit 3 The Firms Long-Run Decision,Unit 4 Supply in a Competitive Market,TR(Q) = PQ,TR,AR=MR=P,Q,Unit 1 Revenue of a Competitive Firm,TR, AR, MR?,Marginal revenue,is the change in total revenue from an additional unit sold.,goal,The goal of a competitive firm is to,maximize profit.,total,revenue,- total,cost,.,derivative,TRTC,TR,TC,Q,A,B,O,Q,0,TFC,When MR MC ,will,increase,Q,When MR AC,，, 0 .,When P= AC,，,= 0 .,when AVC P AC,，, 0 .but continue,(,ignore,sunk costs,),When P=AVC,Critical Point, Shut-down Point,P,AVC exit,A,shutdown,refers to a short-run decision not to produce anything during a specific period of time,Exit,refers to a long-run decision to leave the,market.,The firm considers its,sunk costs,when deciding to exit, but ignores them when deciding whether to shut down.,Sunk costs,are costs that have already been committed and cannot be recovered.,In the zero-profit equilibrium, the firms revenue compensates the owners for the time and money they expend to keep the business going.,short-run supply curve,deduce,：,P1,，,use MR=MC, find Q1,P2,，,use MR=MC,，,find Q2,connect,（,P,1,Q,1,）,(P,2,Q,2,）,so,：,PminAVC,This section MC curve is also the firms supply curve,O,Q,P,P1,P2,Q1,Q2,SMC,AR=MR=D,AVC,Unit 3 The Firms Long-Run Decision,In the long-run,to Exit or Enter a Market,because no FC, so only AC,the,firm,if,P ,AC,Enter,Quantity,MC,AC,0,Costs,Firm enters,if P AC,Firm exits,if P AC,Quantity,MC,AC,0,Costs,Firms long-run supply curve,Market,Firm,Quantity,(firm),0,Price,MC,ATC,P,1,Quantity,(market),Price,0,D,1,P,1,Q,1,A,S,1,(a) Initial Condition(first market then firm),P,Why in a long-run P=MinAC,Suppose Increase in Demand in the Short Run.,D,2,Market,Firm,Quantity,(firm),0,Price,MC,ATC,P,1,Quantity,(market),Price,0,D,1,P,1,Q,1,A,S,1,(b) When increse in demand to D2 then Short-Run get the profit,Q,2,B,P,2,P,2,Profit,Market,Firm,Quantity,(firm),0,Price,MC,ATC,P,1,Quantity,(market),Price,0,D,1,P,1,Q,1,A,S,1,(c) Profit induce entry to S2,so restoring Long-Rune quilibrium,D,2,B,Q,2,P,2,S,2,C,Q,3,So,In a market with free entry and exit,profits are driven to zero,in the long,run.,So P=Min AC,In the zero-profit equilibrium, economic profit is 0,but accounting profit is positive.,Unit 4 Supply in a Competitive,Market,The,Short,Run.,(a) Individual Firm Supply,Quantity,(firm),0,Price,(b) Market Supply,Quantity,(market),Price,0,Supply,MC,1.00,$2.00,100,200,1.00,$2.00,100,000,200,000,The,Long,Run:.,(a) Firms Zero-Profit Condition,Quantity,(firm),0,Price,P,=,minimum,ATC,(b) Market Supply,Quantity,(market),Price,0,Supply,MC,ATC,Why the Long-Run Supply Curve Might Slope Upward,Some resources used in production may be available only in limited,quantities.(such as famers use land),Firms may have different,costs.(first lower costs person enter ,and then the higher cost person enter),