6_3150_impcomp

6_3150_impcomp - Chapter 11 Imperfect Competition Imperfect...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11 Imperfect Competition Eon 3150 York U 1 Imperfect Competition as a Cause of Trade Monopoly Causes 1. Restrictions (legal, like patents or trademarks; technological; resource) for a limited time only a small number of firms have an access to a product’s blueprint/technology/resource. 2. Scale economies in production (small output is too costly to produce e.g. aircraft production) LATER For now assume NO scale effects 3 prices: P*, P a , P m
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 11 Imperfect Competition Eon 3150 York U 2 NO MONOPOLY Both X and Y are produced by perfectly competitive sectors y y MC p = x x MC p = MRT MC MC p p y x y x = = - slope of the PPF ( slope MRT X Y Y wL X wL MC MC y x y x - = Δ Δ - = Δ Δ Δ Δ = given that y x L L Δ = Δ )
Background image of page 2
Chapter 11 Imperfect Competition Eon 3150 York U 3 MONOPOLY Assume: 1. X is produced by a monopoly 2. Y is produced by a perfectly competitive sector 3. H is a small open economy Perfect competition -> price=marginal cost y y MC p = Monopoly -> price is a mark-up over marginal cost
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

6_3150_impcomp - Chapter 11 Imperfect Competition Imperfect...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online