14竞争市场中的厂商

nullnullChapter 14 Firms In Competitive MarketsnullIf your local gas station raised the price it charges for gasoline by 20 percent, it would see a large drop in the amount of gasoline it sold. Its customers would quickly switch to buying their gasoline at other gas stations. By contrast, if your local water company raised the price of water by 20 percent, it would see only a small decrease in the amount of water it sold. People might water their lawns less often and buy more water-efficient shower heads, but they would be hard pressed to reduce water consumption greatly and would be unlikely to find another supplier. The difference between the gasoline market and the water market is obvious: There are many firms pumping gasoline, but there is only one firm pumping water. As you might expect, this difference in market structure shapes the pricing and production decisions of the firms that operate in these markets.null14.1 What Is A Competitive Market?A perfectly competitive market has the following characteristics: There are many buyers and sellers in the market. The goods offered by the various sellers are largely the same (homogeneous ie identical). Firms can freely or exit the market. (there are no barriers to entry into or exit from the industry). There is perfect knowledge. Firms and buyers are completely informed about the product prices of each firm in the industry. The factors of production are completely mobile.null14.1 What Is A Competitive Market?As a result of its characteristics, the perfectly competitive market has the following outcomes: The action of any single buyer or seller in the market have a negligible impact on the market price. Each buyer and seller takes the market price as given. null14.1 What Is A Competitive Market?A competitive market has many buyers and sellers trading identical products so that each buyer and seller is a price taker. Buyers and sellers must accept the price determined by the market. null14.1.2 The Revenue of a Competitive FirmTotal revenue for a firm is the selling price times the quantity sold. TR = ( P×Q) Total revenue is proportional to the amount of the output. Average revenue tells us how much revenue a firm receives for the typical unit sold. Average revenue is total revenue divided by the quantity sold. null14.1.2 The Revenue of a Competitive FirmIn perfect competition, average revenue equals the price of the good. Average Revenue = = = Price Total revenueQuantityPrice × QuantityTotal revenueQuantitynull14.1.2 The Revenue of a Competitive Firm Marginal revenue is the change in total revenue from an additional unit sold. MR = △TR/△Q For competitive firms, marginal revenue equals the price of the good. nullTable 1 Total, Average, and Marginal Revenue for a Competitive Firmnull14.2 Profit Maximization and The Competitive Firm’s Supply CurveThe goal of competitive firm is to maximize profit. This means that the firm will want to produce the quantity that maximizes the difference between total revenue and total cost. nullTable 2 Profit Maximization: A Numerical ExampleFigure 1 Profit Maximization for a Competitive FirmFigure 1 Profit Maximization for a Competitive FirmCopyright © 2004 South-WesternQuantity0CostsandRevenuenullFigure 14-1. Profit Maximization for a Competitive Firm nullFigure 14-1. Profit Maximization for a Competitive Firm This figure shows the marginal-cost curve (MC), the average-total-cost (ATC), and the average-variable-cost (AVC). It also shows the market price (P), which equals marginal revenue (MR) and average revenue (AR). At the quantity Q1, marginal revenue MR1 exceeds marginal cost MC1, so raising production increases profit. At the quantity Q2, marginal cost MC2 is above marginal revenue MR2 , so reducing production increases profit. The profit-maximizing quantity QMAX is found where the horizontal price line intersects the marginal-cost curve. null14.2.2 The Marginal-Cost Curve and The Competitive Firm’s Supply CurveProfit maximization occurs at the quantity where marginal revenue equals marginal cost. When MR > MC → increase Q When MR < MC → decrease Q When MR = MC → Profit is maximized The portion of marginal-cost curve that lies above average variable cost is the competitive firm’s short-run supply curve. nullA general rule for profit maximization: At the profit-maximizing level of output, marginal revenue and marginal cost are exactly equal. For any given price, the competitive firm’s profit-maximizing quantity of output is found by looking at the intersection of the price with the marginal-cost curve. In Figure 1, that quantity of output is QMAX . In essence, because the firm’s marginal-cost curve determines the quantity of the good the firm is wiling to supply at any price, it is the competitive firm’s supply curve. Figure 2 Marginal Cost as the Competitive Firm’s Supply CurveFigure 2 Marginal Cost as the Competitive Firm’s Supply CurveCopyright © 2004 South-WesternQuantity0PricenullAn increase in the price from P1 to P2 leads to an increase in the firm’s profit-maximizing quantity from Q1 to Q2. because the marginal-cost curve shows the quantity supplied by the firm at any given price, it is the firm’s supply curve. Figure 14-2. Marginal Cost as the Competitive Firm’s Supply Curve null 14.2.3 The Firm’s Short-Run Decision to Shut DownA shutdown refers to a short-run decision not to produce anything during a specific period of time because of current market conditions. Exit refers to a long-run decision to leave the market. null 14.2.3 The Firm’s Short-Run Decision to Shut DownThe 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. nullThe firm shuts down if the revenue that it gets from producing is less than the variable cost of production. Shut down if TR < VC Shut down if TR/Q < VC/Q Shut down if P < AVC 14.2.3 The Firm’s Short-Run Decision to Shut DownFigure 3 The Competitive Firm’s Short Run Supply CurveFigure 3 The Competitive Firm’s Short Run Supply CurveCopyright © 2004 South-WesternQuantity0CostsnullIn the short run, the competitive firm’s supply curve is its marginal-cost curve (MC) above average variable cost (AVC). If the price falls below average variable cost, the firm is better off shutting down.Figure14-3. The Competitive Firm’s Short-Run Supply Curve nullCost and Revenue, (dollars)MCMR1AVCATCMARGINAL REVENUE-MARGINAL COST APPROACHQuantity SuppliedMR2MR3MR4MR5P1P2P3P4P5Q2Q3Q4Q5Marginal Cost & Short-Run SupplyDo not Produce – Below AVCnullCost and Revenue, (dollars)MCMR1MARGINAL REVENUE-MARGINAL COST APPROACHQuantity SuppliedMR2MR3MR4MR5P1P2P3P4P5Q2Q3Q4Q5Marginal Cost & Short-Run SupplyYields the Short-Run Supply CurveSupplyNo Production Below AVCnullMARGINAL REVENUE-MARGINAL COST APPROACHMarginal Cost & Short-Run SupplyAVC2MC2Higher Costs Move the Supply Curve to the LeftS2nullMARGINAL REVENUE-MARGINAL COST APPROACHMarginal Cost & Short-Run SupplyAVC2MC2Lower Costs Move the Supply Curve to the RightS2nullSometime in your life you have probably been told, “Don’t cry over spilt milk,” or “Let bygones be bygones.” These adages hold a deep truth about rational decision-making. Economists say that a cost is a sunk cost when it has already been committed and cannot be recovered. In a sense, a sunk cost is the opposite of an opportunity cost: An opportunity cost is what you have to give up if you choose to do one thing instead of another, whereas a sunk cost cannot be avoided, regardless of the choices you make. Because nothing can be done about sunk costs, you can ignore them when making decisions about various aspects of life, including business strategy. 14.2.4 Spilt Milk and Other Sunk CostsnullOur analysis of the firm’s shutdown decision is one example of the irrelevance of sunk costs. We assume that the firm cannot recover its fixed costs by temporarily stopping production. As a result, the firm’s fixed costs are sunk in the short run, and the firm can safely ignore these costs when deciding how much to produce. The firm’s short-run supply curve is the part of the marginal-cost curve that lies above average variable cost, and the size of the fixed cost does not matter for this supply decision. 14.2.4 Spilt Milk and Other Sunk CostsnullThe irrelevance of sunk costs is also important for personal decisions. Imagine, for instance, that you place a $10 value on seeing a newly released movie. You buy a ticket for $7, but before entering the theater, you lose the ticket. Should you buy another ticket? Or should you now go home and refuse to pay a total of $14 to see the movie? The answer is that you should buy another ticket. The benefit of seeing the movie($10) still exceeds the opportunity cost(the $7 for the second ticket). The $7 you paid for the lost ticket is a sunk cost. 14.2.4 Spilt Milk and Other Sunk CostsnullIn the long run, the firm exits the market if the revenue it would get from producing is less than the total costs. Exit if TR < TC Exit if TR/Q < TC/Q Exit if P < ATC 14.2.5 The Firm’s Long-Run Decision to Exit or Enter a MarketnullA firm will enter the industry if such an action would be profitable. Enter if TR > TC Enter if TR/Q > TC/Q Enter if P > ATC 14.2.5 The Firm’s Long-Run Decision to Exit or Enter a MarketFigure 4 The Competitive Firm’s Long-Run Supply CurveFigure 4 The Competitive Firm’s Long-Run Supply CurveCopyright © 2004 South-WesternQuantity0CostsnullIn the long run, the competitive firm’s supply curve is its marginal-cost curve (MC) above average total cost (ATC). If the price falls below average total cost, the firm is better off exiting the market.Figure 4 The Competitive Firm’s Long-Run Supply Curve nullThe competitive firm’s long-run supply curve is the portion of its marginal-cost curve that lies above average total cost. Short-Run Supply Curve The portion of its marginal cost curve that lies above the minimum point of average variable cost. Long-Run Supply Curve The portion of The marginal cost curve above the minimum point of its average total cost curve. The Supply Curve in a Competitive MarketnullFigure 14-4. The Competitive Firm’s Long-Run Supply Curve nullRecall that profit equals total revenue(TR) minus total cost(TC): Profit = TR - TC Profit = (TR/Q - TC/Q) Q Profit = (P - ATC) Q Note that TR/Q is average revenue, which is the price P, and TC/Q is average total cost ATC. Therefore, 14.2.6 Measuring Profit in our graph for the Competitive MarketFigure 5 Profit as the Area between Price and Average Total CostFigure 5 Profit as the Area between Price and Average Total CostCopyright © 2004 South-Western(a) A Firm with ProfitsQuantity0Price(profit-maximizing quantity)Figure 5 Profit as the Area between Price and Average Total CostFigure 5 Profit as the Area between Price and Average Total CostCopyright © 2004 South-Western(b) A Firm with LossesQuantity0Price(loss-minimizing quantity)nullFigure 5 Profit as the Area between Price and Average Total Cost null Figure 14-5. Profit as the Area between Price and Average Total Cost The area of the shaded box between price and average total cost represents the firm’s profit. The height of this box is price minus average total cost (P-ATC), and the width of the box is the quantity of output (Q). In panel (a), price is above average total cost, so the firm has positive. in panel (b), price is less than average total cost, so the firm has losses. nullMarket supply equals the sum of the quantities supplied by the individual firms in the market. 14.3 The Supply Curve in a Competitive MarketnullFor any given price, each firm supplies a quantity of output so that its marginal cost equals price. The market supply curve reflects the individual firm’s marginal cost curves. 14.3.1 The Short Run: Market Supply with a Fixed Number of FirmsFigure 6 Market Supply with a Fixed Number of FirmsFigure 6 Market Supply with a Fixed Number of FirmsCopyright © 2004 South-Western(a) Individual Firm SupplyQuantity (firm)0Price(b) Market SupplyQuantity (market)0PricenullWhen the number of firms in the market is fixed, the market supply curve, shown in panel (b), reflects the individual firms’ marginal-cost curves, shown in panel (a). Here, in a market of 1,000 firms, the quantity of output supplied to the market is 1,000 times the quantity supplied by each firm. Figure 14-6. Market Supply with a Fixed Number of FirmsnullQuestion: 竞争市场的需求曲线为Q = 7000 - 2000P,假设市场有1000个相同的厂商，每一个厂商的边际成本MC= q + 2,其中q为单个厂商的产量，试求市场供给曲线的表达式，均衡价格和均衡数量.解：单个厂商的边际成本为 P =MC=q+2, 即q=P-2. 竞争市场的供给曲线应是1000个相同厂商的边际成本曲线的水平相加。 即Q = 1000q = 1000P-2000. 由于竞争市场的需求曲线为： Q=7000-2000P, 求得：7000-2000P = 1000P-2000, so 均衡价格　P = 3, 均衡数量　Q= 1000 P - 2000 = 1000. nullFirms will enter or exit the market until profit is driven to zero. In the long run, price equals the minimum of average total cost. The long-run market supply curve is horizontal at the price. 14.3.2 The Long Run: Market Supply with Entry and ExitnullFirms will enter or exit the market until profit is driven to zero. Thus, in the long run, price equals the minimum of average total cost, as shown in panel (a). The number of firms adjusts to ensure that all demand is satisfied at this price. The long-run market supply curve is horizontal at this price, as shown in panel (b). Figure 14-7. Market Supply with Entry and ExitnullAt the end of the process of entry and exit , firms that remain must be making zero economic profit. The process of entry and exit ends only when price and average total cost are driven to equality. Long-run equilibrium must have firms operating at their efficient scale. 14.3.2 The Long Run: Market Supply with Entry and ExitnullTo understand the zero-profit condition more fully, recall that profit equals total revenue minus total cost, and that total cost includes all the opportunity costs of the firm. In particular, total cost includes the opportunity cost of the time and money that the firm owners devote to the business. In the zero-profit equilibrium, the firm’s revenue compensates the owners for the time and money they expend to keep the business going. 14.3.3 Why Do Competitive Firms Stay in Business If They Make Zero Profit?nullSuppose that a farmer had to invest $1 million to open his farm, which otherwise he could have deposited in a bank to earn $50,000 a year in interest. In addition, he had to give up another job that would have paid him $30,000 a year. Then the farmer’s opportunity cost of farming includes both the interest he could have earned and the forgone wages----a total of $80,000. Even if his profit is driven to zero, his revenue from farming compensate him for these opportunity costs. 14.3.3 Why Do Competitive Firms Stay in Business If They Make Zero Profit?nullAn increase in demand raises price and quantity in the short run. Firms earn profits because price now exceeds average total cost. 14.3.4 A Shift in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunFirm(a) Initial ConditionQuantity (firm)0PriceMarketQuantity (market)Price0nullFigure 14-8. An Increase in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunCopyright © 2004 South-WesternMarketFirm(b) Short-Run ResponseQuantity (firm)0PriceQuantity (market)Long-runsupplyPrice0P1nullFigure 14-8. An Increase in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunFigure 8 An Increase in Demand in the Short Run and Long RunCopyright © 2004 South-WesternP1Firm(c) Long-Run ResponseQuantity (firm)0PriceMCATCMarketQuantity (market)Price0P1P2Q1Q2Long-runsupplyBD1S1AnullFigure 14-8. An Increase in Demand in the Short Run and Long RunnullSome resources used in production may be available only in limited quantities. Firms may have different costs. Marginal Firm The marginal firm is the firm that would exit the market if the price were any lower. 14.3.5 Why the Long-Run Supply Curve Might Slope UpwardnullPQ=$50SD1Z1Q1D2Z2Q2Q3D3Z3100,000110,00090,000LONG-RUN SUPPLY IN A CONSTANT COST INDUSTRYP1 P2 P3nullPQ=$50SD1Z1Q1D2Z2Q2Q3D3Z3100,000110,00090,000LONG-RUN SUPPLY IN A CONSTANT COST INDUSTRYP1 P2 P3nullPQ$55 50 45SD1Y1Q1D2Y2Q2Q3D3Y3100,000110,00090,000LONG-RUN SUPPLY IN AN INCREASING COST INDUSTRYP2 P1 P3nullPQ$55 50 45SD1Y1Q1D2Y2Q2Q3D3Y3100,000110,00090,000P2 P1 P3LONG-RUN SUPPLY IN AN INCREASING COST INDUSTRYnullPQ$55 50 45SD1Y1Q1D2Y2Q2Q3D3Y3100,000110,00090,000P3 P1 P2LONG-RUN SUPPLY IN AN DECREASING COST INDUSTRYnullSummaryBecause a competitive firm is a firm price taker, its revenue is proportional to the amount of output it produces. The price of the good equals both the firm’s average revenue and its marginal revenue. nullSummaryTo maximize profit, a firm chooses the quantity of output such that marginal revenue equals marginal cost. This is also the quantity at which price equals marginal cost. Therefore, the firm’s marginal cost curve is its supply curve. nullSummaryIn the short run, when a firm cannot recover its fixed costs, the firm will choose to shut down temporarily if the price of the good is less than average variable cost. In the long run, when a firm can recover both fixed and variable costs, it will choose to exit if the price is less than total cost. nullSummaryIn a market with free entry and exit, profits are driven to zero in the long run and all firms produce at the efficient scale. Changes in demand have different effects over different time horizons. In the long run, the number of firms adjusts to drive the market back to the zero-profit equilibrium. Mankiw-ch.14 ProblemMankiw-ch.14 Problem用图形和文字描述完全竞争厂商面临的需求曲线？(So what is the demand curve faced by the individual firm?) 对于完全竞争的厂商来说，生产者剩余与利润是不是一回事？请用图形和文字，或数学公式和文字来表述。 用图形和文字描述完全竞争厂商的短期供给曲线？ 用图形和文字描述完全竞争厂商的长期供给曲线？Appendix 1: Pure CompetitionAppendix 1: Pure CompetitionSmallnessSmallnessWhat does it mean to say that an individual firm is “small relative to the industry”?SmallnessSmallness$/output unityFirm’s MCThe individual firm’s technology causes it always to supply only a small part of the total quantity demanded at the market price.Firm’s demand curvepeAppendix2: The Firm’s Short-Run Supply DecisionAppendix2: The Firm’s Short-Run Supply DecisionBut not every point on the upward-sloping part of the firm’s MC curve represents a profit-maximum. The firm’s profit function is If the firm chooses y = 0 then its profit isAppendix2: The Firm’s Short-Run Supply DecisionAppendix2: The Firm’s Short-Run Supply DecisionSo the firm will choose an output level y > 0 only ifAppendix2: The Firm’s Short-Run Supply DecisionAppendix2: The Firm’s Short-Run Supply DecisionSo the firm will choose an output level y > 0 only if I.e., only if Equivalently, only ifApp3: Producer’s Surplus RevisitedApp3: Producer’s Surplus Revisitedy$/output unitAVCs(y)ACs(y)MCs(y)pPSy*(p)App3: Producer’s Surplus RevisitedApp3: Producer’s Surplus RevisitedSo the firm’s producer’s surplus isThat is, PS = Revenue - Variable Cost.App3: Producer’s Surplus RevisitedApp3: Producer’s Surplus Revisitedy$/output unitAVCs(y)ACs(y)MCs(y)py*(p)App3: Producer’s Surplus RevisitedApp3: Producer’s Surplus RevisitedPS = Revenue - Variable Cost. Profit = Revenue - Total Cost = Revenue - Fixed Cost - Variable Cost. So, PS = Profit + Fixed Cost. Only if fixed cost is zero (the long-run) are PS and profit the same.Problem 3: The Firm’s Short-Run Supply DecisionProblem 3: The Firm’s Short-Run Supply DecisionAVCs(y)ACs(y)MCs(y)The firm’s short-run supply curve$/output unityp > AVCs(y)