1. Market structure and characteristics
Market structure refers to the market state reflecting different degrees of competition, including perfect competition market structure, complete monopoly market structure, monopolistic competition market structure and oligopoly market structure.
Characteristics of market structure:
First, the number of transactions;
Second, whether the quality of the traded goods is the same;
Third, whether there are obstacles to entering the market;
Fourth, the extent to which manufacturers control market prices.
2. The meaning and conditions of perfect competition
It refers to a market structure in which competition is not hindered or interfered in any way.
Conditions:
First, there are countless buyers and producers in the market;
Second, there is no difference between products on the market;
Third, manufacturers and production factors can flow freely;
Buyers and manufacturers are fully aware of market information.
3. Demand curve and income curve under the condition of perfect competition
Because the manufacturer is the price receiver in a perfectly competitive market, he cannot change the price. The demand curve, that is, the price line is horizontal, and the demand curve is also the average income line and marginal income line. P = Ar = Mr = D。
But the demand curve here refers to the demand curve of a single enterprise, not the demand curve of the whole industry.
4. Short-term equilibrium of manufacturers under the condition of perfect competition
In a short time, the price and production scale of products in a perfectly competitive market are fixed, and manufacturers cannot adjust all production factors according to market demand. Therefore, from the perspective of the whole industry, it may be that supply is less than demand (profit), or it may be that supply exceeds demand (loss). The marginal income curve and the average income curve intersect at the lowest point e of the average income curve, and the output at this point is the maximum profit output or the minimum loss output.
The first case: the supply is less than the demand, that is, the price level is high (P & gtSAC), and there is excess profit at this time.
Because demand is greater than supply, the price line must be above the lowest point of the short-term average cost curve. According to the principle of profit maximization: MR=MC, at this time, the total income TR = Po Qo = PooQoE, and the total cost TC = P 1 Qo = P 1 OQoF.
Excess profit = tr-TC = P0p1Fe > 0 or P> bag
In the second case, supply equals demand, that is, price equals average cost (P=SAC). At this time, there is normal profit and excess profit is zero, which is called break-even point.
Because of the balance between supply and demand, the price line must be tangent to the lowest point of the average cost curve. According to the principle of profit maximization: MR=MC, total income TR = Po Qo = PooQoe, and total cost TC = PO QO = POOQOE.
Excess profit =TR-TC = O or P=SAC.
The third situation: supply exceeds demand, that is, the price level is low (p Because supply exceeds demand, the price line must be lower than the lowest point of the average cost curve. According to the principle of profit maximization: MR=MC, total income TR = PO QO = P0 OQoE, and total cost TC = P 1 QO = P 1 OQoF.
Excess profit = tr-TC =-p0p 1fe
The fifth case: there is a loss, but the price is equal to the average variable cost (P=SAVC), that is, the price line is tangent to the lowest point of the average variable cost, and this point E is called the dead point. At this time, it is the same for him whether the manufacturer produces or not, that is, the production income is only enough to make up for all variable costs. But for manufacturers, production is better than no production, because once the situation improves, manufacturers can immediately put into production.
Therefore, in the short term, the condition for manufacturers to continue production is P≥SAVC.
The sixth case: in the case of loss, but the price is less than the average variable cost (p To sum up, in a perfectly competitive market, the condition for short-term equilibrium of manufacturers is: MR=MC.
5. Long-term equilibrium conditions of perfectly competitive manufacturers
In the short term, although perfectly competitive manufacturers can achieve equilibrium, they may lose money in the short-term equilibrium because they cannot adjust the production scale, as mentioned above. But in the long run, all factors of production are variable, so manufacturers can eliminate losses by adjusting their own scale or changing the number of manufacturers in the industry, or carve up excess profits, and finally make excess profits zero, so as to achieve a new equilibrium, that is, long-term equilibrium.
The specific process is as follows:
If the supply is less than the demand and the price level is higher, that is, when there is excess profit, each manufacturer will expand the production scale or new manufacturers will join the industry, so that the supply of the whole industry will increase, the market price will drop, the demand curve of individual manufacturers will move down, and the excess profit will decrease until the excess profit disappears.
If the supply exceeds demand and the price level is low, that is, losses will occur, manufacturers may reduce the production scale or some manufacturers in the industry will quit, thus reducing the supply of the whole industry, lowering the market price, and moving up the demand curve of individual manufacturers until the losses disappear.
Supply equals demand, achieving long-term equilibrium.
In the long run, because manufacturers can freely enter or exit a certain industry and adjust their production scale, the situation that supply is less than demand and supply exceeds demand will automatically disappear, and the final price level will reach a state where each manufacturer has neither excess profit nor loss. At this time, the supply and demand of the whole industry are balanced, and the output of each manufacturer is no longer adjusted, thus achieving a long-term equilibrium.
The condition of long-term equilibrium is: MR=AR=MC=AC.
It can also be written as: MR=AR=LMC=LAC=SMC=SAC.
The long-term equilibrium characteristics of a perfectly competitive market;
First, the manufacturers who survive when the industry reaches a long-term equilibrium have the highest economic efficiency and the lowest cost;
Second, manufacturers who survive when the industry reaches a long-term equilibrium can only get normal profits. If there are excess profits, it will attract new manufacturers, thus expanding the supply of the whole market and reducing the market price to the point where each manufacturer can only get normal profits.
Third, when the industry reaches a long-term equilibrium, the output provided by each manufacturer is both the lowest point of its short-term average cost curve and the lowest point of its long-term average cost curve.
6. Evaluation of enterprise behavior mode under the condition of perfect competition
When understanding long-term equilibrium, we should pay attention to two points:
First, the point of long-term equilibrium is the breakeven point (P=AC). At this time, the cost and benefit are equal. What manufacturers can get can only be the reward of entrepreneurs as one of the factors of production-normal profits. As one of the expenses for production factors, normal profit is cost. Break-even point includes normal profit. Therefore, as long as normal profits are obtained, profits are maximized.
Second, when a long-term equilibrium is reached, the average cost is equal to the marginal cost (MC=AC), which shows that under the condition of perfect competition, the cost can be minimized or the economic efficiency can be the highest, that is, from the social point of view, the resource allocation among various products is optimal.
A fully competitive market mechanism is like an invisible hand, which can realize the optimal allocation of social resources.
7. The meaning, characteristics and reasons of complete monopoly
Complete monopoly refers to the market structure of only one producer in the whole industry.
Conditions:
The manufacturer is the industry, that is, there is only one manufacturer in the whole industry, providing all the output required by the whole industry;
There is no substitute for the products produced by the manufacturer, that is, the cross elasticity of product demand is zero, so that the manufacturer will not be threatened by any competitors;
It is almost impossible for other manufacturers to enter this industry.
Under these conditions, the complete monopolist has no competitors and there is no competitive factor in the market, so the manufacturer can control and manipulate the market price.
Reason for existence:
The exclusive manufacturer controls the supply of all resources or key resources for producing a certain product.
The exclusive manufacturer has the patent right to produce a certain product.
Government concessions, such as railway transportation, water supply, power supply and other departments, the government often grants monopoly rights to a manufacturer.
Natural monopoly refers to those industries that need to show economies of scale in production or have obvious characteristics of increasing returns to scale in the case of huge output.
8. Demand curve and income curve of manufacturers under the condition of complete monopoly
In a completely monopolized market, because there is only one manufacturer in the market, the demand for monopolist's products is the demand of the whole market. Therefore, the demand curve faced by monopolists is the demand curve of the whole market. A completely monopolized manufacturer is the decider of the market price, and it can decide the price by changing the sales volume. Therefore, the demand curve faced by a complete monopoly manufacturer is a demand curve inclined to the lower right, which shows that if a complete monopoly manufacturer wants to increase sales, it must reduce the price, and the manufacturer can only do so.
After the price of a product is determined by a completely monopolized manufacturer, the price paid by the buyer is also the average income of a unit product sold by the manufacturer. Therefore, the average income of manufacturers also decreases with the increase of product sales, and the average income curve AR overlaps with the demand curve D faced by manufacturers. At the same time, the marginal revenue MR obtained by the manufacturer from each additional unit of product sales is also decreasing, which is less than AR under each sales volume, so the marginal revenue curve is on the left side of the average revenue curve.
9. Short-term equilibrium and long-term equilibrium of manufacturers under the condition of complete monopoly
Compared with long-term equilibrium and complete competition, the short-term equilibrium in a completely monopolized market is the same in words, but the difference is the change in graphics. Because in a completely monopolized market, the demand curve is a line inclined to the lower right, while in a completely competitive market, the demand curve is a horizontal line. The specific process is as follows:
Short-term equilibrium of enterprises:
In a completely monopolized market, manufacturers can maximize profits by controlling output and price, but manufacturers in a completely monopolized position cannot do whatever they want, which is limited by market demand. In a completely monopolized market, manufacturers still have to follow the principle of profit maximization (marginal revenue equals marginal cost) to determine their optimal output. After this output is determined, it is difficult to fully meet the market demand in a short period of time. In this way, supply may be less than demand (profit).
Please note the following points:
The demand curve, that is, the price line, is inclined to the lower right, because in a completely monopolized market, the manufacturer is the decider of the price, and he may change the price;
Marginal income is less than average income;
The marginal income curve intersects with the lowest point e of the average income curve, and the output at this point is the maximum profit output or the minimum loss output.
The first case: supply is less than demand, that is, the price level is high (the price line is above the average cost curve), and there is excess profit at this time (Figure A).
According to the principle of profit maximization, when MR=MC, the price and output are optimal. At this time, the price and output are PO and QO respectively. When drawing, we should pay attention to lead the line from the intersection of marginal revenue and marginal cost to the horizontal axis (quantity axis), where QO is the optimal output, then lead the line to the demand curve at point F, and then to the vertical axis (price axis), where PO is the optimal price.
According to the principle of profit maximization: MR=MC, at this time, the total income TR = PO QO = POQOF, and the total cost TC = H QO = HOQOG.
Excess profit =TR-TC = P0HGF (shaded part in Figure A)
(a) (b)
In the second case, supply equals demand, that is, price equals average cost (the price line is tangent to the average cost line). At this time, there is normal profit and excess profit is zero, which is called breakeven point (Figure B).
According to the principle of profit maximization: MR=MC, total income TR = po QO = pooqoe, and total cost TC = PO QO = POOQOE.
Excess profit =TR-TC = O
The third case: supply exceeds demand, that is, the price level is low (P price line is lower than the average cost curve), at this time, there is a loss and the excess profit is negative (Figure C).
According to the principle of profit maximization: MR=MC, total income TR = PO QO = P0 OQoE, total cost TC = H QO = HOQOG.
Excess profit = TR-TC =-HPOFG (shaded part in figure c)
In the case of loss, whether the enterprise produces at this time depends on the average variable cost. As long as the average variable cost is below the price line, it will still be produced despite the loss, because at this time, the manufacturer can recover all the variable costs and part of the fixed costs, and the loss during production is smaller than that during non-production.
The fourth case: in the case of loss, as long as the price is greater than or equal to the average cost, the enterprise will still produce, and the tangent point f between the price line and the average variable cost is called the stopping point. At this time, it is the same for him whether the manufacturer produces or not, that is, the production income is only enough to make up for all variable costs. But for manufacturers, production is better than no production, because once the situation improves, manufacturers can immediately put into production. (figure c)
Therefore, the condition for manufacturers to continue production in the short term is P≥AVC.
(c) (d)
The fifth case: in the case of loss, but the price is less than the average variable cost (that is, the price line becomes the average)
Below this line, the manufacturer can only recover part of the variable cost at this time, and the loss of production is greater than that of no production, so it must stop production.
To sum up, in a completely monopolized market, the condition of short-term equilibrium of manufacturers is: MR=MC.
Long-term equilibrium conditions:
In the short term, although perfectly competitive manufacturers can achieve equilibrium, they may lose money in the short-term equilibrium because they cannot adjust the production scale, as mentioned above. However, in the long run, a completely monopolized manufacturer can adjust all the production factors, change the scale of production, and obtain economies of scale from the aspects of technology and management, so the manufacturer will always make excess profits by himself, and it is impossible for other manufacturers to join the completely monopolized industry for a long time. Excess profits of manufacturers can and should be maintained for a long time. If the total income of a completely monopolized manufacturer can't make up for its economic costs in the long-term operation, then unless the government gives long-term subsidies, it will inevitably withdraw from the industry. The long-term equilibrium feature of a completely monopolized industry is that it has excess profits. As shown in the figure:
In the figure, the long-term marginal cost curve LMC and the marginal revenue curve MR of the monopoly manufacturer intersect at point E. At this time, according to the principle of profit maximization, the manufacturer has reached a long-term equilibrium, the equilibrium output is Q0, and the equilibrium price is P0. The excess profit obtained by the manufacturer is indicated by the shadow in the figure.
The condition of long-term equilibrium is: MR=LMC=SMC.
10. the difference between the long-term equilibrium of perfectly competitive enterprises and monopoly enterprises
First of all, the conditions for long-term equilibrium are different.
The long-term equilibrium condition of perfectly competitive manufacturers is: P=MR=SMC=LMC=LAC=SAC. The long-term equilibrium condition of monopoly manufacturers is: MR=LMC=SMC.
Second, the positions of long-term equilibrium points are different.
The long-term equilibrium of perfectly competitive enterprises comes from the lowest point of the long-term average cost curve; However, the long-term equilibrium of a completely monopolized firm cannot be generated at the lowest point of the long-term average cost curve.
Third, the profits are different.
Perfect competitors can only get normal profits when they are in a long-term equilibrium; Monopoly competitors can get excessive monopoly profits because other manufacturers can't enter the industry.
1 1. Price discrimination of completely monopolized manufacturers
Price discrimination, or differential pricing, means that monopolists charge different prices for different consumers of the same product at the same time.
Conditions for price discrimination:
First, the seller is a monopolist and can manipulate the price;
Second, the seller understands the price elasticity of different consumers' demand for the goods they sell;
Third, sellers can separate markets with different elasticity, so that consumers in low-priced markets cannot sell goods bought at low prices in high-priced markets, otherwise price discrimination cannot be implemented.
Type:
First-class price discrimination, also known as complete price discrimination, means that manufacturers determine the price of a unit commodity according to the highest price that consumers are willing to pay.
Second-degree price discrimination means that manufacturers charge different prices according to the different quantities purchased by consumers. The smaller the purchase volume, the higher the manufacturer's charge, and the larger the purchase volume, the lower the manufacturer's charge.
Third-level price discrimination means that manufacturers charge different prices for the same commodity in different consumer groups and different markets.
The meaning and conditions of monopoly competition
Monopoly competition refers to the market structure in which many manufacturers produce and sell different similar products, and there are both competitive factors and monopoly factors in the market. It has the characteristics of complete competition and complete monopoly.
Conditions:
There are many manufacturers and buyers in the market, and the production scale of each manufacturer is relatively small.
2. The products produced by manufacturers in the industry are different, and these products have good substitutability.
3. There are fewer barriers to enter the market, and manufacturers and production factors can enter and leave the market more freely.
Comparing the conditions of monopoly competitive market and perfect competitive market, it is found that their market structures are similar, and the fundamental difference lies in the difference of products, which is the decisive reason for the coexistence of monopoly factors and competitive factors in monopoly competitive market.
13. demand curve of monopolistic competition
The demand curve faced by manufacturers in a monopolistic competitive market is neither horizontal nor steep as that of manufacturers in a perfectly competitive market, but a relatively flat curve inclined to the lower right.
The characteristics of monopolistic competitive market structure make each manufacturer face two demand curves, as shown in Figure 5- 10, one is expected demand curve D, and the other is actual demand curve D. 。
Figure 5- 10 demand curve of monopoly competitors
14. Enterprise Equilibrium in Monopoly Competition
The conditions for short-term equilibrium of monopoly competitors are:
MR=SMC
d=D
At this point, the manufacturer may have excess profits, losses or only normal profits.
The conditions for the long-term equilibrium of monopoly competitors are:
Sir =LMC=SMC
AR=LAC=SAC
d=D
15. The meaning and conditions of oligopoly
Oligopoly refers to the market structure in which a few manufacturers control the production and sales of the whole market.
Concentration is usually used as the standard to measure the degree of oligopoly. Concentration refers to the ratio of sales (or output, number of employees, assets, etc.). ) a certain number of manufacturers (such as four) to the whole industry. The greater the concentration rate, the higher the degree of monopoly.
Conditions:
1. There are few manufacturers in the industry.
2. The products produced by manufacturers can be undifferentiated or differentiated.
There are great obstacles to enter the oligopoly market.
16. Cournot model
It is the earliest oligopoly model founded by French economist Cournot.
Cournot model assumes that only two manufacturers A and B produce exactly the same products in the market; The manufacturer's production cost is zero, and the maximum profit can only be obtained if the maximum profit is obtained; The two manufacturers face the same linear demand curve and adopt the same market price; Every manufacturer thinks that the output of its competitors will not change.
Under this assumption, the equilibrium output of A and B is equal to 65438+ 0/3 of the maximum market demand, and the total output of the two manufacturers is equal to 2/3 of the maximum market demand. If there are n manufacturers in this industry, the equilibrium output of each manufacturer is 1/n+ 1 of the maximum market demand, and the total output is N/n+65438 of the maximum market demand.
17 Sweezy model
It was put forward by American economist Sweezy to explain the relatively stable price in oligopoly market.
The assumption of Sweezy model is: because oligopolistic manufacturers will realize the interdependence, when an oligopolistic manufacturer raises the price, its competitors will not raise the price to maintain market share; However, when oligopolistic manufacturers reduce their prices, their competitors also reduce their prices to avoid the reduction of market share, thus forming a characteristic demand curve-a curved demand curve (the demand curve of the protruding point), as shown in the figure, point E is the bending point.
Because the demand curve has an inflection point, the corresponding marginal revenue curve becomes two discontinuous segments: Mr 1 and Mr 2. Then when the marginal cost curve MC is located at any position between two points of FG, the output and price corresponding to the profit maximization of the manufacturer remain unchanged. That is to say, when the cost changes within a certain range, the output and price of the manufacturer are relatively stable, and the total income (product of price and output) remains unchanged.