tailieunhanh - Tài liệu trung cấp môn Kinh tế vi mô bằng tiếng Anh - Phần 25

Tài liệu tham khảo Tài liệu trung cấp môn Kinh tế vi mô bằng tiếng Anh gồm 41 phần giúp sinh viên khoa kinh tế học tốt môn Kinh tế vi mô. Tài liệu này là phần 25 giới thiệu về " Monopoly " | CHAPTER 24 MONOPOLY In the preceding chapters we have analyzed the behavior of a competitive industry a market structure that is most likely when there are a large number of small firms. In this chapter we turn to the opposite extreme and consider an industry structure when there is only one firm in the industry a monopoly. When there is only one firm in a market that firm is very unlikely to take the market price as given. Instead a monopoly would recognize its influence over the market price and choose that level of price and output that maximized its overall profits. Of course it can t choose price and output independently for any given price the monopoly will be able to sell only what the market will bear. If it chooses a high price it will be able to sell only a small quantity. The demand behavior of the consumers will constrain the monopolist s choice of price and quantity. We can view the monopolist as choosing the price and letting the consumers choose how much they wish to buy at that price or we can think of the monopolist as choosing the quantity and letting the consumers decide what price they will pay for that quantity. The first approach is probably more natural but the second turns out to be analytically more convenient. Of course both approaches are equivalent when done correctly. 424 MONOPOLY Ch. 24 Maximizing Profits We begin by studying the monopolist s profit-maximization problem. Let us use p y to denote the market inverse demand curve and c y to denote the cost function. Let r y p y y denote the revenue function of the monopolist. The monopolist s profit-maximization problem then takes the form max r y - c y . y The optimality condition for this problem is straightforward at the optimal choice of output we must have marginal revenue equal to marginal cost. If marginal revenue were less than marginal cost it would pay the firm to decrease output since the savings in cost would more than make up for the loss in revenue. If the marginal .