【正文】 he dominant firm’s demand curve is the difference between market demand (D) and the supply of the fringe firms (SF). 86 Chapter 1 Cartels ? Characteristics 1) Explicit agreements to set output and price 2) May not include all firms 87 Chapter 1 Cartels ? Examples of successful cartels ? OPEC ? International Bauxite Association ? Mercurio Europeo ? Examples of unsuccessful cartels ? Copper ? Tin ? Coffee ? Tea ? Cocoa ? Characteristics 3) Most often international 88 Chapter 1 Cartels ? Characteristics 4) Conditions for success ?Competitive alternative sufficiently deters cheating ?Potential of monopoly powerinelastic demand 89 Chapter 1 Cartels ? Comparing OPEC to CIPEC ? Most cartels involve a portion of the market which then behaves as the dominant firm 90 Chapter 1 The OPEC Oil Cartel Price Quantity MROPEC DOPEC TD SC MCOPEC TD is the total world demand curve for oil, and SC is the petitive supply. OPEC’s demand is the difference between the two. QOPEC P* OPEC’s profits maximizing quantity is found at the intersection of its MR and MC curves. At this quantity OPEC charges price P*. 91 Chapter 1 Cartels ? About OPEC ? Very low MC ? TD is inelastic ? NonOPEC supply is inelastic ? DOPEC is relatively inelastic 92 Chapter 1 The OPEC Oil Cartel Price Quantity MROPEC DOPEC TD SC MCOPEC QOPEC P* The price without the cartel: ?Competitive price (PC) where DOPEC = MCOPEC QC QT Pc 93 Chapter 1 The CIPEC Copper Cartel Price Quantity MRCIPEC TD DCIPEC SC MCCIPEC QCIPEC P* PC QC QT ?TD and SC are relatively elastic ?DCIPEC is elastic ?CIPEC has little monopoly power ?P* is closer to PC 94 Chapter 1 Example ? Suppose there are ten identical textile producers. Each firm produces at a constant marginal cost of $2. The market demand curve is given by P=, where price is measured in dollars and quantity in pounds. The ten firms are currently behaving as petitive (pricetaking) firms. They are thinking of forming a cartel with the purpose of restricting quantity and raising the price to the monopoly level. ? A) What is the current market price, market output, and output per firm? ? B) What would be the cartel price, cartel output, and output (individual quota) per firm? ? C) If profits from the cartel were divided equally, what would be each firm’s share of the cartel profits? ? D) Suppose one firm decides to “cheat” by charging a price 25 cents below the cartel price. This firm will sell all of their output (their cartel quota from part B) plus the additional output demanded) at this discounted price. Will cheating be profitable, pared to your answer from part C)? (Assume that the other nine firms stay loyal to the cartel.) 95 Chapter 1 Cartels ? Observations ? To be successful: ?Total demand must not be very price elastic ?Either the cartel must control nearly all of the world’s supply or the supply of noncartel producers must not be price elastic 96 Chapter 1 The Cartelization of Intercollegiate Athletics ? Observations 1) Large number of firms (colleges) 2) Large number of consumers (fans) 3) Very high profits 97 Chapter 1 ? Question ? How can we explain high profits in a petitive market? (Hint: Think cartel and the NCAA) The Cartelization of Intercollegiate Athletics 98 Chapter 1 The Milk Cartel ? 1990s with less government support, the price of milk fluctuated more widely ? In response, the government permitted six New England states to form a milk cartel (Northeast Interstate Dairy Compact NIDC) 99 Chapter 1 The Milk Cartel ? 1999 legislation allowed dairy farmers in Northeastern states surrounding NIDC to join NIDC, 7 in 16 Southern states to form a new regional cartel. ? Soy milk may bee more popular. 100 Chapter 1 Summary ? In a monopolistically petitive market, firms pete by selling differentiated products, which are highly substitutable. ? In an oligopolistic market, only a few firms account for most or all of production. 101 Chapter 1 Summary ? In the Cournot model of oligopoly, firms make their output decisions at the same time, each taking the other’s output as fixed. ? In the Stackelberg model, one firm sets its output first. 102 Chapter 1 Summary ? The Nash equilibrium concept can also be applied to markets in which firms produce substitute goods and pete by setting price. ? Firms would earn higher profits by collusively agreeing to raise prices, but the antitrust laws usually prohibit this. 103 Chapter 1 Summary ? The Prisoners’ Dilemma creates price rigidity in oligopolistic markets. ? Price leadership is a form of implicit collusion that sometimes gets around the Prisoners Dilemma. ? In a cartel, producers explicitly collude in setting prices and output levels. 104 Chapter 1 End of Lecture 12 Monopolistic Competition and Oligopoly 105 Chapter 1 演講完畢，謝謝觀看！