经济学专业英语教程（第四版-上）课件：Oligopoly

《经济学专业英语教程（第四版·上）》

Text:Oligopoly

（寡头垄断）1.Keywords2.Characteristicsofoligopoly3.Priceandoutputdecisionsforanoligopolist4.AnEvaluationofOligopoly5.TranslatethefollowingintoChinese6.Questions1.KeywordsimperfectlycompetitivemarketstructuremanufacturingindustrystandardizedproductnonpricecompetitionkinkeddemandcurvepriceleadershipproductdifferentiationR＆DpricemakerpricetakerpricerigidityOPECcrudeoilperfectlycompetitivefirm2.Characteristicsofoligopoly2.1Definitionofoligopoly2.2Characteristicsofoligopoly2.1DefinitionofoligopolyOligopolyisanimperfectlycompetitivemarketstructureinwhichafewlargefirmsdominatethemarket.Manymanufacturingindustries,suchassteel,aluminum,automobiles,aircraft,drugs,andtobacco,arebestdescribedasoligopolistic.Anoligopolyischaracterizedby:Fewsellers;Eitherahomogeneousoradifferentiatedproduct;Difficultmarketentry.Oligopolyisfoundinreal-worldindustries.2.2Characteristicsofoligopoly2.2.1FewSellers2.2.2HomogeneousorDifferentiatedProduct2.2.3DifficultEntry2.2.1FewSellersOligopolyiscompetition“amongthefew.”Basically,anoligopolyisaconsequenceofmutualinterdependence.Mutualinterdependenceisaconditioninwhichanactionbyonefirmmaycauseareactionfromotherfirms.Statedanotherway,amarketstructurewithafewpowerfulfirmsmakesiteasierforoligopoliststocollude.2.2.2HomogeneousorDifferentiatedProductUnderoligopoly,firmscanproduceeitherahomogeneousoradifferentiatedproduct.TheoilsoldbySaudiArabiaisidenticaltotheoilfromIran.Similarly,zinc,copper,andaluminumarestandardizedproducts.Butcarsproducedbythemajorautomakersaredifferentiatedproducts.2.2.3DifficultEntryFormidablebarrierstoentryinanoligopolyprotectfirmsfromnewentrants.Thesebarriersincludeexclusivefinancialrequirements,controloveranessentialresource,patentrights,andotherlegalbarriers.Butthemostsignificantbarriertoentryinanoligopolyiseconomiesofscale.3.Priceandoutputdecisionsforanoligopolist3.1Nonpricecompetition3.2Thekinkeddemandcurve3.3Priceleadership3.4Thecartel3.1NonpricecompetitionMajoroligopolistsoftencompeteusingadvertisingandproductdifferentiation.Insteadof“sluggingitout”withpricecuts,oligopolistsmaytrytocapturebusinessawayfromtheirrivalsthroughbetteradvertisingcampaignsandimprovedproducts.Whymightoligopolistscompetethroughnonpricecompetition,ratherthanpricecompetition?Theansweristhateacholigopolistperceivesthatitsrivalwilleasilyandquicklymatchanypricereduction.Ontheotherhand,itismuchmoredifficulttocombatacleverand/orimportantproductimprovement.3.2ThekinkeddemandcurveThekinkeddemandcurveisademandcurvefacinganoligopolistthatassumesrivalswillmatchapricedecrease,butignoreapriceincrease.Withoutcollusion,thekinkeddemandcurveexistsbecausemanagementtacitlybelievesthatthecompetitionwillnotbe“undersold.”Ontheotherhand,apricehikebyonefirmallowscompetitorstocaptureitsshareofthemarket.Oligopolisticfirmsmustmakepricingdecisions,sotheyarepricemakers,ratherthanpricetakers.Butaswewillsoonseeinthekinkeddemandmodel,thehighdegreeofinterdependenceamongoligopolistsrestrictstheirpricingdiscretion.3.3PriceleadershipWithoutformalagreement,firmscanplayagameoffollow-the-leaderthateconomistscallpriceleadership.Priceleadershipisapricingstrategyinwhichadominantfirmsetsthepriceforanindustryandtheotherfirmsfollow.Followingthistactic,firmsinanindustrysimplymatchthepriceofperhaps,butnotnecessarily,thebiggestfirm.3.4ThecartelAnotherwaytoavoidpricewarsisforoligopoliststoagreetoapeacetreaty.Insteadofallowingmutualinterdependencetoleadtorivalry,firmsopenlyorsecretlyconspiretoformamonopolycalledacartel.Acartelisagroupoffirmsthatformallyagreetocontrolthepriceandtheoutputofaproduct.Thegoalofacartelistoreapmonopolyprofitsbyreplacingcompetitionwithcooperation.4.Anevaluationofoligopoly4.1Thepricechargedfortheproductwillbehigherthanunderperfectcompetition.4.2Bothpriceandoutputmaybehigherunderoligopolythanunderperfectcompetition.4.3Theoligopolistcanearnahigherprofitthanunderperfectcompetition.4.1Thepricechargedfortheproductwillbehigherthanunderperfectcompetition.Thesmallerthenumberoffirmsinanoligopolyandthemoredifficultitistoentertheindustry,thehighertheoligopolypricewillbeincomparisontotheperfectlycompetitiveprice.4.2Bothpriceandoutputmaybehigherunderoligopolythanunderperfectcompetition.Anoligopolyislikelytospendmoneyonadvertising,productdifferentiation,andotherformsofnonpricecompetition.Theseexpenditurescanshiftthedemandcurvetotheright.Asaresult,bothpriceandoutputmaybehigherunderoligopolythanunderperfectcompetition.4.3Theoligopolistcanearnahigherprofitthanunderperfectcompetition.Inthelongrun,aperfectlycompetitivefirmearnszeroeconomicprofit.Theoligopolist,however,canearnahigherprofitbecauseitismoredifficultforcompetitorstoentertheindustry.5.TranslatethefollowingintoChinese(1)Thelargenumberoffirmsunderperfectcompetitionormonopolisticcompetitionandtheabsenceofotherfirmsinmonopolyruleoutmutualinterdependenceandcollusioninthesemarketstructures.(2)Insteadof“sluggingitout”withpricecuts,oligopolistsmaytrytocapturebusinessawayfromtheirrivalsthroughbetteradvertisingcampaignsandimprovedproducts.(3)Thekinkeddemandcurveisademandcurvefacinganoligopolistthatassumesrivalswillmatchapricedecrease,butignoreapriceincrease.(4)Pricerigidityiseliminatedonlyafterlargecostincreas