Chapter6EconomiesofScale,ImperfectCompetitio

1、 Chapter 6 Economies of Scale, Imperfect Competition, and International Trade(continue)1 In last section, We neglect price discrimination (such as dumping) in the imperfect competitive model which give rise international trade. 2 Clips: 中国鞋如何迎战反倾销连环箭3一、Dumping(倾销)The Economics of Dumping In reality,

2、 firms do not charge the same price for goods that are exported and sold domestically, it is the price discrimination.Price discrimination: The practice of charging different customers different prices. Dumping is the most common form of price discrimination in international trade.4Definition of Dum

3、ping It is a pricing practice in which a firm charges a lower price for an exported good than it does for the same good sold domestically It is a controversial issue in trade policy and is widely regarded as an unfair practice in international trade.5Dumping can occur only if two conditions are met:

4、 First, the industry must be Imperfectly competitive industry, so that firms set prices rather than taking prices as given. Second, market must be segmented, so that domestic residents cannot easily purchase goods intended for export(transport costs and protectionist trade barriers). 6A monopolistic

5、 firm gets profits by dumping An example below help to show dumping can be a profit-maximizing strategy by Figure 6-8. To maximize profits, the firm must set marginal revenue equal to marginal cost in each market. We assume that the firm can sell as much as it wants at the PFOR in the foreign market

6、.7Figure 6-8: DumpingExportsDomestic salesCost, C andPrice, PQuantities producedand demanded, QMCDFOR = MRFORMRDOMDDOM2PFORPDOM QDOMQMONOPOLYTotal output138 The firm sell QDOM in the domestic market and sell QMONOPOLY - QDOM in the foreign market . The quantity QDOM will be demanded domestically at

7、price of PDOM , which is above the export price PFOR . Thus the firm is indeed dumping, selling more cheaply abroad than at Home. 9 The reason the firm chooses to dump is the difference in the responsiveness of sales to price in the export and domestic markets(P143). 10Reciprocal DumpingReciprocal D

8、umping is a situation in which dumping leads to two-way trade in the same product. The reason is that if it tries to sell more it will drive down the price on its existing domestic sales. But dumping has the negative effect on the price of existing sales in the foreign sales. 11It increases the volu

9、me of trade in goods that are not quite identical.Its net welfare effect is ambiguous: It wastes resources in transportation. It creates some competition.12 Case studyThe dumping cases against China in 2008. 13 2008年1-6月，16个世贸组织成员共启动85起反倾销调查，比2007年同期的61起增加24起，增幅达39%.在2008年上半年新立案的85起反倾销案中，由发达成员发起的31起

10、，同比（20起）增加11起；发展中成员为54起，同比（41起）增加13起。在54起采取最终反倾销措施的案件中，发达成员占13起，与2007年同期持平；发展中成员为41起，同比（38起）增加3起。 14 中国仍是全球反倾销调查最大的受害者。在85起反倾销新立案中，涉及中国产品的位居首位，为37起，占比43.5%，同比增加16起，增幅达76.2%；其次是泰国，为7起；位居第三位的是欧盟和印尼，均为5起；位居第四位的韩国、马来西亚和中国台湾，均为4起；位居第五位的越南，为3起。此后依次为巴西（2起）、加拿大（2起）、印度（2起）、美国（2起）。 15 美国商务部2008年1月4日宣布对进口自中国的一

11、种钢管作出反倾销初裁，认定中国产钢管在美倾销，并初步确定对多家中国企业征收25.67%的反倾销税，中途撤出调查的双街集团税率更被确定为51.34%。 2004年到2006年，中国对美国的环状焊接碳素钢管出口量激增143%，其中2006年，出口产品金额达3.32亿美元，较上年增长55.2%。16 美国商务部认为，中国出口至美国的环状焊接碳素钢管低于市场公平价值最高达51.34%。作为上述裁定结果，美国商务部将通知其海关和边境以此为基准收取保证金。17二、The Theory of External Economies(外部经济理论) As we pointed out early in this

12、 chapter, not all scale economies apply at the level of the individual firm. When economies of scale apply at the level of the industry rather than the level of the individual firm, they called external economies.18What is the external economies Economies of scale that occur at the level of the indu

13、stry instead of the firm are called external economies.There are three main reasons why a cluster of firms may be more efficient than an individual firm in isolation:19 Specialized Suppliers（专业提供商） An individual company does not provide a large enough market for specialized equipment and services to

14、 keep the suppliers in business. A localized industrial cluster can solve this problem by bringing together many firms that provide a large enough market to support specialized suppliers.20 This phenomenon has been extensively documented in the semiconductor industry located in Silicon Valley.21 Lab

15、or Market Pooling（劳动力共享市场） A cluster of firms can create a pooled market for workers with highly specialized skills. Advantage of a cluster of firms : First, Producers are less likely to suffer from labor shortages. Second, Workers are less likely to become unemployed.22Knowledge Spillovers（知识外溢） Kn

16、owledge is one of the important input factors in highly innovative industries. The specialized knowledge that is crucial to success in innovative industries comes from:23Research and development efforts; Reverse engineering; Informal exchange of information and ideas - external economies.24External

17、Economies and Increasing Returns External economies can give rise to increasing returns to scale at the level of the national industry. Increasing Returns can be showed by Forward-falling supply curve: The larger the industrys output, the lower the price at which firms are willing to sell their outp

18、ut.25 External Economies play an important role in international trade.External Economies and the Pattern of TradeCountries that start out as large producers in certain industries tend to remain large producers even if some other country could potentially produce the goods more cheaply.三、External Ec

19、onomies and International Trade26Figure 6-9 illustrates a case where a pattern of specialization established by historical accident is persistent, it tends to confirm existing patterns of interindustry trade. We assume that the Thai cost curve lies below the Swiss curve, this means that Thailand cou

20、ld manufacture watch is more cheaply than Switzerland. 27Figure 6-9: External Economies and SpecializationACSWISSQ1P1Price, cost (per watch)Quantity of watchesproduced and demandedACTHAI21C0D28 If the Swiss industry gets established first, it may be able to sell watches at the price P1 , which is be

21、low the cost C0 that an individual Thai firm would face if it began production on its own. So a pattern of specialization established by historical accident may persist even when new producers could potentially have lower cost. 29Trade and Welfare with External Economies Trade based on external econ

22、omies has more ambiguous effects on national welfare than either trade based on comparative advantage or trade based on economies of scale at the level of the firm. An example of how a country can actually be worse off with trade than without is shown in Figure 6-10.30Figure 6-10: External Economies

23、 and Losses from TradeACSWISSP1Price, cost (per watch)Quantity of watchesproduced and demandedACTHAI21C0DTHAIDWORLDP231 If no trade in watches were allowed and Thailand were forced to be self-sufficient, then the Thai equilibrium would be at the point 2, P2 , is actually lower than the price of Swiss-made watches at point 1, P1 . There is an incentive in this case for Thailand to protect its potential watch industry from foreign competition. 32Dynamic Increasing Returns(动态收益递增) Another issue