首页
外语
计算机
考研
公务员
职业资格
财经
工程
司法
医学
专升本
自考
实用职业技能
登录
考研
Is the outcome in a monopolistically (垄断地) competitive market desirable from the standpoint of society as a whole? Can policymak
Is the outcome in a monopolistically (垄断地) competitive market desirable from the standpoint of society as a whole? Can policymak
admin
2011-03-14
34
问题
Is the outcome in a monopolistically (垄断地) competitive market desirable from the standpoint of society as a whole? Can policymakers improve on the market outcome? There are no simple answers to these questions.
One source of inefficiency is the markup (涨价) of price over marginal cost. Because of the markup, some consumers who value the good at more than the marginal cost of production (but less than the price) will be deterred (被阻止) from buying it. Thus, a monopolistically competitive market has the normal deadweight loss of monopoly .pricing.
Although tins outcome is clearly undesirable compared to the first-best outcome of price equal to marginal cost, there is no easy way for policymakers to-fix the problem. To enforce marginal-cost pricing, policymakers would need to regulate all firms that produce differentiated products. Because such products are so common in the economy, the administrative burden of such regulation would be overwhelming. Moreover, the regulating monopolistic competitors would entail all the problems of regulating natural monopolies. In particular, because monopolistic competitors are making zero profits already, requiring them to lower their prices to equal marginal cost would cause them to make losses. To keep these firms in business, the government would need to help them cover these losses. Rather than raising taxes to pay for these subsidies, policymakers may decide it is better to live with tile inefficiency of monopolistic pricing
Another way in which monopolistic competition may be socially inefficient is that the number of firms in the market may not be the "ideal" one. That is, there may be too much or too little entry. One way to think about this problem is in terms of the externalities associated with entry. Whenever a new firm considers entering the market with a new product, it considers only the profit it would make. Yet its entry would also have two external effects: a) The product-variety externality: Because consumers get some consumer surplus from the introduction of a new product, there is a positive externality associated with entry b) The business-stealing externality: Because other firms lose customers and profits from the entry of a new competitor, there is a negative externality associated with entry. Thus in a monopolistically competitive market, there are both positive and negative externalities associated with the entry of new firms. Depending on which externality is larger, a monopolistically competitive market could have either too few or too many products. Both of these externalities are closely related to the conditions for monopolistic competition. The former arises because a new firm would offer a product different from those of the existing firms. The latter arises because firms post a price above marginal cost and, therefore, are always eager to sell additional units. Conversely, because perfectly competitive firms produce identical goods and charge a price equal to marginal cost, neither of these externalities exists under perfect competition.
In the end, we can conclude only that monopolistically competitive markets do not have all the desirable welfare properties of perfectly competitive markets. That is, the invisible hand does not ensure that total surplus is maximized under monopolistic competition. Yet because the inefficiencies are subtle, hard to measure, and hard to fix, there is no easy way for public policy to improve the market outcome.
What does a new firm think about when it considers entering the market with a new product?
选项
A、Two external effects.
B、The externalities associated with entry.
C、The number of firms in the market.
D、The profit it would make.
答案
D
解析
句子Whenever a new firm considers entering the market with a new product,it considers only the profit it would make.明确地告诉了答案。
转载请注明原文地址:https://kaotiyun.com/show/dSsa777K
本试题收录于:
MBA联考(英语)题库专业硕士分类
0
MBA联考(英语)
专业硕士
相关试题推荐
假设有两个寡头垄断厂商的行为遵循古诺模型,它们的成本函数分别为:这两个厂商生产一同质产品,其市场需求函数为:Q=4000+10p。根据古诺模型,试求:(1)厂商1和厂商2的反应函数;(2)均衡价格和厂商1与厂商2的均衡产量;(3)厂商
垄断厂商采用价格歧视的原则是()。
寡头垄断厂商的产品是()。
Directions:Inthissection,youareaskedtowriteanessaybasedonthefollowingtable.Describethetableandstateyouropin
Oneofthesaddestthingsabouttheperiodinwhichweliveisthegrowingestrangement(疏远)betweenAmericaandEurope.Thismay
Voiceswere______astheargumentbetweenthetwomotoristsbecamemorebad-tempered.
Itremainstobeseenwhetherthereservesofrawmaterialsintheyear2000willbesufficienttosupplyaworldeconomywhich
Theroleofgovernmentsinenvironmentalmanagementisdifficultbutinescapable.Sometimes,thestatetriestomanagetheresou
Theroleofgovernmentsinenvironmentalmanagementisdifficultbutinescapable.Sometimes,thestatetriestomanagetheresou
随机试题
消化性溃疡最常发生在
A.心室前负荷加重B.心室后负荷加重C.心室前后负荷均加重D.心肌收缩力减弱E.心肌舒张期顺应性降低主动脉瓣关闭不全
患者,男,50岁。肝硬化腹水,腹大坚满,脘闷纳呆,大便溏,小便不利,舌苔白腻,脉弦缓。其治法是
竖向规划设计应该在()层次进行。
基金规模越大,基金管理费率越高,基金风险程度越高,基金管理费率越低。()
某公司因生产经营的需要再筹资50万元。现有两种筹资方案可供选择:①增发25,000股普通股,每股发行价为20元;②发行债券50万元,债券年利率为10%。公司的息税前盈余目标为40万元,所得税率为25%,该公司筹资后的盈余状况见下表:根据上述资料,回答下
证明:A~B,其中并求可逆阵P,使得P-1AP=B.
Mostyoungchildrenareawarewhenadvertisementsarebeingshownontelevision.TherearefewertoyadvertisementsonBritish
CanLoudMusicCauseHearingImpairment(损伤)?Haveyouevergonetoaconcertandrealizedthatyourseatswererightnextto
Nodirectrelationshiphasbeenprovenbetweenhighcholesterollevelsandheartattacks.Oneoftheeducationalactivitiesin
最新回复
(
0
)