中级微观经济学课件辉英语第22章

1、Chapter Twenty-TwoFirm Supply厂商供给厂商供给StructureuMarket environmentsuMarket demand for a competitive firmuShort-run supply decisionlUpward sloping MC curvelShut-down conditionuLong-run supply decisionuComparing long-run and short-run decisions.uProducers surplus and profitsFirm SupplyuHow does a firm

2、decide how much product to supply? This depends upon the firmsl technologyl market environmentl goalsl competitors behaviorsMarket EnvironmentsuAre there many other firms, or just a few?uDo other firms decisions affect our firms payoffs?uIs trading anonymous, in a market? Or are trades arranged with

3、 separate buyers by middlemen?Market EnvironmentsuMonopoly (垄断）垄断）: Just one seller that determines the quantity supplied and the market-clearing price.uOligopoly （寡头垄断）寡头垄断）: A few firms, the decisions of each influencing the payoffs of the others.Market EnvironmentsuDominant Firm: Many firms, but

4、one much larger than the rest. The large firms decisions affect the payoffs of each small firm. Decisions by any one small firm do not noticeably affect the payoffs of any other firm. Market EnvironmentsuMonopolistic Competition （垄断竞争垄断竞争）: Many firms each making a slightly different product. Each f

5、irms output level is small relative to the total.uPure Competition: Many firms, all making the same product. Each firms output level is small relative to the total.Market EnvironmentsuLater chapters examine monopoly, oligopoly, and the dominant firm.uThis chapter explores only pure competition.Pure

6、CompetitionuA firm in a perfectly competitive market knows it has no influence over the market price for its product. The firm is a market price-taker.uThe firm is free to vary its own price.Pure CompetitionuIf the firm sets its own price above the market price then the quantity demanded from the fi

7、rm is zero.uIf the firm sets its own price below the market price then the quantity demanded from the firm is the entire market quantity-demanded.Pure CompetitionuSo what is the demand curve faced by the individual firm?Pure CompetitionY$/output unitMarket SupplyMarket DemandpePure Competitiony$/out

8、put unitMarket SupplypepAt a price of p, zero is demanded from the firm.Market DemandPure Competitiony$/output unitMarket Supplypepp”At a price of p” the firm faces the entire market demand.At a price of p, zero is demanded from the firm.Market DemandPure CompetitionuSo the demand curve faced by the

9、 individual firm is . Pure Competitiony$/output unitMarket Supplypepp”At a price of p” the firm faces the entire market demand.At a price of p, zero is demanded from the firm.Market DemandPure CompetitionY$/output unitpepp”Market DemandSmallnessuWhat does it mean to say that an individual firm is “s

10、mall relative to the industry”?Smallness$/output unityFirms MCThe individual firms technology causes italways to supply only a small part of the total quantity demanded at the market price.Firms demand curvepeThe Firms Short-Run Supply DecisionuEach firm is a profit-maximizer and in a short-run.uQ:

11、How does each firm choose its output level?The Firms Short-Run Supply DecisionuEach firm is a profit-maximizer and in a short-run.uQ: How does each firm choose its output level?uA: By solvingmax( )( ).yssypycy 0 The Firms Short-Run Supply Decisionmax( )( ).yssypycy 0 What can the solution ys* look l

12、ike?The Firms Short-Run Supply Decisionmax( )( ).yssypycy 0 What can the solution ys* look like?(a) ys* 0: (y)yys*( )( )( )( )( ).*idydypMCyiidydyat yyssss 0022The Firms Short-Run Supply Decisionmax( )( ).yssypycy 0 What can the solution y* look like?(b) ys* = 0: (y)yys* = 0dydypMCyat yysss ( )( ).*

13、 00The Firms Short-Run Supply DecisionFor the interior case of ys* 0, the first-order maximum profit condition isdydypMCyss ( )( ). 0That is,pMCyss ().*So at a profit maximum with ys* 0, themarket price p equals the marginalcost of production at y = ys*.The Firms Short-Run Supply DecisionFor the int

14、erior case of ys* 0, the second-order maximum profit condition is dydyddypMCydMCydysss220 ( )( )( ). That is,dMCydyss().* 0So at a profit maximum with ys* 0, thefirms MC curve must be upward-sloping.The Firms Short-Run Supply Decision$/output unitypeys*yMCs(y)The Firms Short-Run Supply Decision$/out

15、put unitypeys*yAt y = ys*, p = MC and MCslopes upwards. y = ys* is profit-maximizing.MCs(y)The Firms Short-Run Supply Decision$/output unitypeys*yAt y = ys*, p = MC and MCslopes upwards. y = ys* is profit-maximizing.At y = y, p = MC and MC slopes downwards.y = y is profit-minimizing.MCs(y)The Firms

16、Short-Run Supply Decision$/output unitypeyAt y = ys*, p = MC and MCslopes upwards. y = ys* is profit-maximizing. So a profit-max. supply level can lie only on the upwards sloping part of the firms MC curve.MCs(y)ys*The Firms Short-Run Shut-Down ConditionuBut not every point on the upward-sloping par

17、t of the firms MC curve represents a profit-maximum.uBut not every point on the upward-sloping part of the firms MC curve represents a profit-maximum.uThe firms profit function isuIf the firm chooses y = 0 then its profit is ssvypycypyFcy( )( )( ). svyFcF( )( ). 00The Firms Short-Run Shut-Down Condi

18、tion uSo the firm will choose an output level y 0 only if svypyFcyF( )( ). The Firms Short-Run Shut-Down ConditionuSo the firm will choose an output level y 0 only ifuI.e., only ifEquivalently, only if svypyFcyF( )( ). pycyv ( )0pcyyAVCyvs ( )( ).The Firms Short-Run Shut-Down ConditionAVCs(y)ACs(y)M

19、Cs(y)$/output unityThe Firms Short-Run Shut-Down ConditionAVCs(y)ACs(y)MCs(y)$/output unityThe Firms Short-Run Shut-Down ConditionAVCs(y)ACs(y)MCs(y)$/output unityp AVCs(y)The Firms Short-Run Shut-Down ConditionAVCs(y)ACs(y)MCs(y)p AVCs(y) ys* 0. $/output unityThe Firms Short-Run Shut-Down Condition

20、The Firms Short-Run Supply DecisionAVCs(y)ACs(y)MCs(y)p AVCs(y) ys* = 0. $/output unityp AVCs(y) ys* 0. The Firms Short-Run Supply DecisionAVCs(y)ACs(y)MCs(y)p AVCs(y) ys* = 0. The firms short-runsupply curve$/output unityp AVCs(y) ys* 0. The Firms Short-Run Supply DecisionAVCs(y)ACs(y)MCs(y)The fir

21、ms short-runsupply curveShutdown point$/output unityThe Firms Short-Run Supply DecisionuShut-down is not the same as exit.uShutting-down means producing no output (but the firm is still in the industry and suffers its fixed cost).uExiting means leaving the industry, which the firm can do only in the

22、 long-run.The Firms Long-Run Supply DecisionuThe long-run is the circumstance in which the firm can choose amongst all of its short-run circumstances.uHow does the firms long-run supply decision compare to its short-run supply decisions?The Firms Long-Run Supply DecisionuA competitive firms long-run

23、 profit function isuThe long-run cost c(y) of producing y units of output consists only of variable costs since all inputs are variable in the long-run. ( )( ).ypyc y The Firms Long-Run Supply DecisionuThe firms long-run supply level decision is touThe 1st and 2nd-order maximization conditions are,

24、for y* 0,max( )( ).yypyc y 0 pMC y anddMC ydy ( )( ). 0The Firms Long-Run Supply DecisionuAdditionally, the firms economic profit level must not be negative since then the firm would exit the industry. So, ( )( )( )( ).ypyc ypc yyAC y 0The Firms Long-Run Supply DecisionMC(y)AC(y)y$/output unitThe Fi

25、rms Long-Run Supply DecisionMC(y)AC(y)y$/output unitp AC(y)The Firms Long-Run Supply DecisionMC(y)AC(y)y$/output unitp AC(y)The Firms Long-Run Supply DecisionMC(y)AC(y)y$/output unitThe firms long-runsupply curveY$/output unitLMC=long-run supplyCminLong-Run Constant Average CostsThe Firms Long-Run S

26、upply DecisionuHow is the firms long-run supply curve related to all of its short-run supply curves?The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)pys*y*ys* is profit-maximizing in this sho

27、rt-run.The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)pys*y*ys* is profit-maximizing in this short-run. sThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)pys*y*The firm can increase profit by increasingx2 and producing y* output units. s

28、The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)p”ys*ys* is loss-minimizing in this short-run.The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitACs(y)MCs(y)p”ys*ys* is loss-minimizing in this short-run.LossThe Firms Long & Short-Run Supply DecisionsMC(

29、y)AC(y)y$/output unitACs(y)MCs(y)p”ys*This loss can be eliminated in the long-run by the firm exiting the industry.LossThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitpys*ys* is profit-maximizing in this short-run.

30、The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitpys*ys* is profit-maximizing in this short-run. sThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitpys*ys* is profit-maximizing in this short-run.y* is profit-maximizing in the long-run.y*The Firms Long & Short-Run S

31、upply DecisionsMC(y)AC(y)y$/output unitpys*ys* is profit-maximizing in this short-run.y* is profit-maximizing in the long-run.y* The Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitpys*y* s The firm can increase profit by reducingx2 and producing y* units of output.The Firms Long & Sh

32、ort-Run Supply DecisionsMC(y)AC(y)y$/output unitThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitThe Firms Long & Short-Run Supply DecisionsMC(y)AC(y)y$/output unitShort-run supply curvesLong-run supply curveLong Ru

33、n and Short Run SupplyuThe long-run supply curve is more elastic than the short-run supply curve.uBecause the firm has more leeway in adjusting supply in the long-run than in the short run.Producers Surplus RevisiteduThe firms producers surplus is the accumulation, by extra unit of output, of extra revenue less extra production cost.uHow is producers surplus related to profit