Chapter 9 Monopoly BUS 500B

8/11/2019 Chapter 9 Monopoly BUS 500B

1/32

!"#$%&' ) *+,+-+./

01234516 7/ 89:;??;


2/32

In this chapter,

look for the answers to these questions:

"+@ 2A, A B5C C+,+-+.9D1 A CA5E13F

GH/ 6+ C+,+-+.91I A59I1F GH/ 9I !"J # K+5 A C+,+-+.9I3F

"+@ 6+ C+,+-+.91I 2H++I1 3H195 #A,6 $F

"+@ 6+ C+,+-+.91I AL123 I+2913/MI @1..N719,OF

GHA3 2A, 3H1 O+P15,C1,3 6+ A7+43C+,+-+.91IF

GHA3 9I -5921 69I259C9,AQ+,F


3/32


4/32

GH/ *+,+-+.91I #59I1

%H1 CA9, 2A4I1 +K C+,+-+.91I 9I .'((/*(0+" *#+(&W+3H15 B5CI 2A,,+3 1,315 3H1 CA5E13S

;A55915 3+ 1,35/ #,/ 9C-169C1,3 3HA3 -51P1,3I ,1@ B5CI K5+C 1,3159,O A,

9,64I35/S #,6 2+C-1Q,O +, A, 1X4A. 7AI9I @93H 1Y9IQ,OB5CI

%H511 I+4521I +K 7A55915I 3+ 1,35/U

12 # I9,O.1 B5C +@,I A E1/ 51I+4521S

&SOST Z1;115I +@,I C+I3 +K 3H1 @+5.6MI69AC+,6 C9,1I

32 %H1 O+P3 O9P1I A I9,O.1 B5C 3H1 1Y2.4I9P1 59OH3 3+ -5+64213H1 O++6S

&SOST -A31,3IT 2+-/59OH3 .A@I


5/32

GH/ *+,+-+.91I #59I142 5'+6('% !"#"$"%&U A I9,O.1 B5C 2A, -5+6421 3H1

1,Q51 CA5E13 !A3 .+@15 2+I3 3HA, 2+4.6 I1P15A.

B5CIS

!

!+I3

&'(

[???

\>?

&YAC-.1U [??? H+C1I

,116 1.12359293/&.12359293/

&'(I.+-1I

6+@,@A56 641

3+ H4O1 )(A,6

ICA.. !(

&'(9I .+@15 9K

+,1 B5C I15P921I

A.. [??? H+C1I3HA, 9K 3@+ B5CI

1A2H I15P921

>?? H+C1IS >??

\]?


6/32

*+,+-+./ PIS !+C-1QQ+,U Z1CA,6 !45P1I

R, A 2+C-1QQP1 CA5E13T 3H1

CA5E13 61CA,6 245P1 I.+-1I

6+@,@A56S

;43 3H1 61CA,6 245P1

K+5 '#& /#7/8/76'% 9(!:0

-5+6423 /0 ;"(/


7/32


8/32

A C T I V E L E A R N I N G 1

# C+,+-+./MI 51P1,41

Q P TR AR MR

0 $4.50

1 4.002 3.50

3 3.00

4 2.50

5 2.00

6 1.50

,SAS

!+CC+, `5+4,6I9I 3H1 +,./ I1..15 +K

2A--4229,+I 9, 3+@,S

%H1 3A7.1 IH+@I 3H1

CA5E13 61CA,6 K+5

2A--4229,+IS

a9.. 9, 3H1 C9II9,O

I-A21I +K 3H1 3A7.1S

GHA3 9I 3H1 51.AQ+,

713@11, #A,6%&F

;13@11, #A,6 '&F


9/32

A C T I V E L E A R N I N G 1

#,I@15I

"151T #^%&T

IAC1 AI K+5 A

2+C-1QQP1 B5CS

"151T '&J #T

@H151AI '&^ #

K+5 A 2+C-1QQP1 B5CS

[S>?b

cS??>

cS>?d

eS??e

eS>?c

[S>?

cS??

cS>?

eS??

eS>?\dS??dS??[

,SAS

)

[?

[?

)

fd

\ ?\dS>??

'&%&(!

g[

?

[

c

e

\d


10/32

!+CC+, `5+4,6IM * A,6 !" !45P1I

Ne

Nc

N[

?

[c

e

d

>

? [ c e d > b f !

#T '&

'&

\

Z1CA,6 245P1h#i

[S>?b

cS??>

cS>?d

eS??e

eS>?c

dS??[

\dS>??

'!

g[

?

[

c

e

\d


11/32


12/32

# *+,+-+.9I3MI `A9, A,6 0+II 9, %+3A. '1P1,41

K5+C =1..9,O A a+453H


13/32

$5+B3N*AY9C9DAQ+,

09E1 A 2+C-1QQP1 B5CT A C+,+-+.9I3CAY9C9D1I -5+B3 7/ -5+6429,O 3H1 X4A,Q3/

@H151 '&^ '2S

j,21 3H1 C+,+-+.9I3 961,QB1I 3H9I X4A,Q3/T

93 I13I 3H1 H9OH1I3 -5921 2+,I4C15I A51 @9..9,O

3+ -A/ K+5 3HA3 X4A,Q3/S

R3 B,6I 3H9I -5921 K5+C 3H1 $245P1S


14/32

$5+B3N*AY9C9DAQ+,

12 %H1 -5+B3N

CAY9C9D9,O !

9I @H151

!"^ !(S

32 a9,6 # K5+C

3H1 61CA,6 245P1

A3 3H9I !S

k4A,Q3/

!+I3I A,6'1P1,41

!"

*

!(

$5+B3NCAY9C9D9,O +43-43

#

!


15/32

%H1 *+,+-+.9I3MI $5+B3

#I @93H A

2+C-1QQP1 B5CT3H1 C+,+-+.9I3MI

-5+B3 1X4A.I

h#g%(2i Y !

k4A,Q3/

!+I3I A,6'1P1,41

&'(

*

!"

!(

!

#

%(2


16/32

# *+,+-+./ Z+1I l+3 "AP1 A, = !45P1

=6$$%& >6(8* +*%%0 60 +;* ?6'#@+& +;'+ ' 9(!>;""0*0 +" 06$$%& '+ '#& A/8*# $(/>*

B >"!$*@@8* 9(!

3AE1I #AI O9P1,

HAI A I4--./ 245P1 3HA3 IH+@I H+@ 93I !61-1,6I +, #SB !"#"$"%& 9(!

9I A m-5921NCAE15Tn ,+3 A m-5921N3AE15n

!6+1I ,+3 61-1,6 +, #o!A,6 #A51 p+9,3./ 61315C9,16 7/!(T !"T A,6 3H1 61CA,6 245P1S

"1,21T ,+ I4--./ 245P1 K+5 C+,+-+./S


17/32

%H1 G1.KA51 !+I3 +K *+,+-+./

'12A..U R, A 2+C-1QQP1 CA5E13 1X49.97594CT#C '2 345 '26 '&A,6 3+3A. I45-.4I 9I

CAY9C9D16S

R, 3H1 C+,+-+./ 1XMCT #D '&C '2

%H1 PA.41 3+ 74/15I +K A, A669Q+,A. 4,93 h#i1Y2116I 3H1 2+I3 +K 3H1 51I+4521I ,11616 3+

-5+6421 3HA3 4,93 h!(iS %H1 C+,+-+./ !9I 3++ .+@ g

2+4.6 9,251AI1 3+3A. I45-.4I @93H A .A5O15 !S

%H4IT C+,+-+./ 51I4.3I 9, A 61A6@19OH3 .+IIS


18/32

#+ !(

Z1A6@19OH3.+II

#

!(

%H1 G1.KA51 !+I3 +K *+,+-+./

!+C-1QQP1 1XMCUX4A,Q3/ ^ !E

#^ !(

3+3A. I45-.4I 9I

CAY9C9D16

*+,+-+./ 1XMCU

X4A,Q3/ ^ !F

#q !(

61A6@19OH3 .+II k4A,Q3/

$5921

*

!"

!(

!F !E


19/32

G*'7-*/A;+ H"00 "I F"#"$"%&

Z1A6@19OH3 .+II

+K C+,+-+./

Nl13 .+II 3+

I+2913/

NGH1, A B5C

@93H CA5E13

-+@15

51I35923I

+43-43 A,69,251AI1I 3H1

-5921


20/32

J*(I*>+ E"!$*@@"# '#7 F"#"$"%& E"!$'(*7

c?

Sc=MC=ATC

Quantityper periodQm Qc0

Dolla

rsperunit

pm

pc

D

c

a

MRm

b

m

A perfectly competitive industry

would produce output QC,determined by the intersection ofthe market demand curve D andthe market supply curve SC. Theprice would be pC. A monopoly thatcould produce output at the same

minimum average cost as aperfectly competitive industrywould produce output Qm,determined at point b, wheremarginal cost intersects themonopolist's marginal revenue.

The monopolist would charge pricepm. Thus, given the same costs,output is lower and price ishigher under monopoly than

under perfect competition.


21/32

$5921 Z9I259C9,AQ+,

Z9I259C9,AQ+,U 351AQ,O -1+-.1 69L151,3./ 7AI16+, I+C1 2HA5A23159IQ2T 1SO,5A21 +5 O1,615S

J(/>* 7/0>(/!/#'@"#U I1..9,O 3H1 IAC1 O++6

A3 69L151,3 -5921I 3+ 69L151,3 74/15IS

%H1 2HA5A23159IQ2 4I16 9, -5921 69I259C9,AQ+,9I @9..9,O,1II 3+ -A/ hG%$iU

# B5C 2A, 9,251AI1 -5+B3 7/ 2HA5O9,O A H9OH15 -5921 3+

74/15I @93H H9OH15 G%$S


22/32

J(/>* G/0>(/!/#'@"# /# +;* K*'% L"(%7

R, 3H1 51A. @+5.6T -15K123 -5921 69I259C9,AQ+,9I ,+3 -+II97.1U

l+ B5C E,+@I 1P15/ 74/15MI G%$

;4/15I 6+ ,+3 51P1A. 93 3+ I1..15I

=+T B5CI 69P961 24I3+C15I 9,3+ O5+4-I7AI16 +, I+C1 +7I15PA7.1 35A93

3HA3 9I .9E1./ 51.A316 3+ G%$T I42H AI 9,2+C1S


23/32

$5921 Z9I259C9,AQ+,

!+,69Q+,I K+5 -5921 69I259C9,AQ+,

Z+@,@A56 I.+-9,O 61CA,6 245P1

=+C1 CA5E13 -+@15

#3 .AI3 3@+ O5+4-I +K 2+,I4C15I

G93H 69L151,3 -5921 1.AIQ293/ +K 61CA,6

#79.93/ 3+ 2HA5O1 69L151,3 -5921I

#3 .+@ 2+I3 !4I3+C15I 2A, 71 I1-A5A316 9, QC1

$51P1,3 51I1..9,O +K 3H1 -5+6423

ce


24/32

# *+61. +K $5921 Z9I259C9,AQ+,

%@+ O5+4-I +K 2+,I4C15I

j,1 O5+4- hAiU .1II 1.AIQ2 61CA,6

%H1 +3H15 h7iU C+51 1.AIQ2 61CA,6

*AY9C9D1 -5+B3

*' ^ *! 9, 1A2H CA5E13

0+@15 -5921 K+5 O5+4- h7i

cd


25/32

$5921 Z9I259C9,AQ+, @93H %@+ `5+4-I +K !+,I4C15I

c>

D

(a) Consumer groupwith less elastic demand

LRAC, MC

(b) Consumer groupwith more elastic demand

400 Quantity per period0 500 Quantity per period0

A monopolist facing two groups of consumers with different demand elasticities may beable to practice price discrimination to increase profit or reduce loss. With marginalcost the same in both markets, the firm charges a higher price to the group in panel(a), which has a less elastic demand than group in panel (b).

Dollars

perunit

$3.00

1.00LRAC, MC

MR

Dollars

perunit

$1.50

1.00

D!MR!


26/32

&YAC-.1I +K $5921 Z9I259C9,AQ+,

*+P91 Q2E13IZ9I2+4,3I K+5 I1,9+5IT I3461,3IT A,6 -1+-.1@H+ 2A, Ar1,6 6459,O @11E6A/ As15,++,IS

%H1/ A51 A.. C+51 .9E1./ 3+ HAP1 .+@15 G%$3HA, -1+-.1 @H+ -A/ K4.. -5921 +, a596A/ ,9OH3S

#95.9,1 -5921IZ9I2+4,3I K+5 =A3456A/N,9OH3 I3A/+P15I H1.-

69IQ,O49IH 74I9,1II 35AP1.15IT @H+ 4I4A../ HAP1H9OH15 G%$T K5+C C+51 -5921NI1,I9QP1 .19I45135AP1.15IS


27/32

&YAC-.1I +K $5921 Z9I259C9,AQ+,

Z9I2+4,3 2+4-+,I$1+-.1 @H+ HAP1 QC1 3+ 2.9- A,6 +5OA,9D12+4-+,I A51 C+51 .9E1./ 3+ HAP1 .+@15 9,2+C1

A,6 .+@15 G%$ 3HA, +3H15ISl116N7AI16 B,A,29A. A96

0+@ 9,2+C1 KAC9.91I HAP1 .+@15 G%$ K+53H195 2H9.651,MI 2+..1O1 1642AQ+,S=2H++.I -5921N69I259C9,A31 7/ +L159,O,116N7AI16 A96 3+ .+@ 9,2+C1 KAC9.91IS


28/32

&YAC-.1I +K $5921 Z9I259C9,AQ+,

k4A,Q3/ 69I2+4,3I

# 74/15MI G%$ +s1, 612.9,1I @93H A669Q+,A.

4,93IT I+ B5CI 2HA5O1 .1II -15 4,93 K+5 .A5O1

X4A,QQ1I 3HA, ICA.. +,1IS

&YAC-.1U # C+P91 3H1A315 2HA5O1I \d K+5

A ICA.. -+-2+5, A,6 \> K+5 A .A5O1 +,1 3HA3MI

3@921 AI 79OS


29/32

!jl!0


30/32


31/32

S U M M A R Y

*+,+-+./ B5CI CAY9C9D1 -5+B3I 7/ -5+6429,O3H1 X4A,Q3/ @H151 CA5O9,A. 51P1,41 1X4A.I

CA5O9,A. 2+I3S ;43 I9,21 CA5O9,A. 51P1,41 9I .1II

3HA, -5921T 3H1 C+,+-+./ -5921 @9.. 71 O51A315

3HA, CA5O9,A. 2+I3T .1A69,O 3+ A 61A6@19OH3 .+IIS

*+,+-+./ B5CI hA,6 +3H15I @93H CA5E13 -+@15i

35/ 3+ 5A9I1 3H195 -5+B3I 7/ 2HA5O9,O H9OH15 -5921I

3+ 2+,I4C15I @93H H9OH15 @9..9,O,1II 3+ -A/S%H9I -5A2Q21 9I 2A..16 -5921 69I259C9,AQ+,S


32/32

Documents

Chapter 9 Monopoly BUS 500B