TAILIEUCHUNG - Lecture Managerial economics (Ninth edition): Chapter 12 – Thomas, Maurice

Chapter 12 - Managerial decisions for firms with market power. In this chapter, we also briefly developed the theory of monopolistic competition. Of all firms with market power, a monopolistically competitive firm has the least. The barriers to entry are so low that it is easy for new firms to enter the market when economic profits are made by existing firms. | Chapter 12 Managerial Decisions for Firms with Market Power Market Power Ability of a firm to raise price without losing all its sales Any firm that faces downward sloping demand has market power Gives firm ability to raise price above average cost & earn economic profit (if demand & cost conditions permit) 12- Monopoly Single firm Produces & sells a good or service for which there are no good substitutes New firms are prevented from entering market because of a barrier to entry 12- Measurement of Market Power Degree of market power inversely related to price elasticity of demand The less elastic the firm’s demand, the greater its degree of market power The fewer close substitutes for a firm’s product, the smaller the elasticity of demand (in absolute value) & the greater the firm’s market power When demand is perfectly elastic (demand is horizontal), the firm has no market power 12- Measurement of Market Power Lerner index measures proportionate amount by which price .

• Kinh tế học
• Managerial economics
• Lecture Managerial economics
• Microeconomic theory
• Economic theory
• Managerial decisions
• Market power
• Market interactions
• Fundamentals of managerial economics
• Marginal analysis
• Marginal benefit
• Economic principles
• Kinh tế học quản lý
• Price discrimination
• Monopolistic competition
• Oligopoly games
• Traditional oligopoly models
• Capital market
• Labour market
• Economic equations
• Economic applications
• Economic applications of derivatives
• Economic application
• Multi variable functions
• Constrained optimization
• Scatter diagram
• Forms of money
• Monetary policy
• Perfect competition
• Demand function
• Supply function
• Quantitative demand analysis
• Theory of individual behavior
• Demand estimation
• Production function
• Costs of production
• Organizing production