微观经济学（黄新飞）Chapter 10.ppt

Chapter 10 Oligopoly and petition
黄新飞
International Business School
Sun-Yat Sen University
2
Market Power
Market power signifies the degree of control that a firm or a small number of firms has over the price and production decisions in an industry.
The mon measure of market power is the four-firm concentration ratio.
3
Firm Output
Firm 1 25
Firm 2 20
Firm 3 15
Firm 4 10
Firm 5 8
Firm 6 7
Firm 7 5
Firm 8 5
Firm 9 3
Firm 10 2
=70
Four-Firm Concentration Ratio
Concentration Ratios:


c4 =
q1 + q2 + q3 +q4
25+20+15+10
100
Q
=
= 70%
4
Cigarettes
Household refrigerators
Electric light bulbs
Motor vehicles
Greeting cards
Blast furnaces
Screw products
5%_4%
Tools, dies, and jigs
3%_2%
93%
82%
86%
84%
84%
37%
7%
16%
8%
7%
4%
21%
4 panies
Next 4 panies
5
Warning on Concentration
Conventional concentration measures include only domestic production and exclude imports.
Conventional concentration measures also ignore the growing impact petition from other industries.
6
The Nature of petition
Economists have found that three major factors are present in petitive markets:
Costs
Barriers petition
Strategic interaction (策略互动)
7
Percentage of industry
output produced by the
Industry four largest firms.
Chewing Gum 96%
Household laundry equipment 93
Cigarettes 92
Electric lamps (bulbs) 91
Motor vehicles 90
Small arms ammunition 88
Primary copper 87
Breakfast cereals 87
Beer and malt beverages 87
Household refrigerators 85
Greeting card publishing 85
Book publishing 24%
Upholstered furniture 24
Wood furniture 20
Metal house furniture 18
Paperboard boxes 16
Bolts, nuts, and rivets 16
Fur goods 16
Women’s and misses’ suits and coats 13
Metal doors 13
Women’s and misses’ dresses 6
Oligopoly
petition
8
Strategic Interaction
Describes how each firm’s business strategy depends on their rivals’ strategies.
As the number of firms in an industry shrinks and industry concentration grows, each firm is more likely to base pricing a