《(2020年){财务管理财务知识}平狄克微观经济学笔记》由会员分享，可在线阅读，更多相关《(2020年){财务管理财务知识}平狄克微观经济学笔记（20页珍藏版）》请在金锄头文库上搜索。
1、财务管理财务知识平狄克微观经济学笔记CHAPTER8PROFITMAXIMIZATIONANDCOMPETITIVESUPPLYTEACHINGNOTESThischapteridentifiesthebehavioralincentivesoftheprofit-maximizingfirmandthenexplorestheinteractionofthesefirmsinapetitivemarket.Eachsectionofthechapterisimportantandbuildsasolidunderstandingofthesupplysideofthepetitivemark
2、et.ItisnecessarytobuildthisfoundationbeforemovingontothechaptersinpartIIIofthetext.Whilethematerialinthechapteriswritteninaveryclear,easytounderstandmanner,studentsstillstrugglewithmanyoftheconceptsrelatedtohowthefirmshouldchoosetheoptimalquantitytoproduce,andhowtoapplythecostcurvediagramlearnedinth
3、epreviouschapter.Oneoptionforlectureistospendtimeworkingwithatablesimilartotheoneusedintheexercisesattheendofthechapter.Workingthroughmanyexampleswiththistypeofatablecanhelpthestudentsunderstandthedifferenttypesofcost,aswellasthefirmsoptimallevelofproduction.Section8.1identifiesthethreebasicassumpti
4、onsofperfectpetitionandsection8.2discussestheassumptionofprofitmaximizationasthegoalofthefirm.Bothsectionsareimportantinbuildingthefoundationforderivingthefirmssupplycurve,whichisdoneinsections8.3to8.5.Section8.3derivesthegeneralresultthatthefirmshouldproducewheremarginalrevenueisequaltomarginalcost
5、.Thesectionthengoesontoidentifyperfectpetitionasaspecialcasewherepriceisequaltomarginalrevenue,whichfollowsdirectlyfromtheassumptionofpricetakerbehaviorinsection8.1.Ifyourstudentshavehadcalculus,itishelpfultoderivethemarginalrevenueequalsmarginalcostrulebydifferentiatingtheprofitfunctionwithrespectt
6、oq.Ifyourstudentshavenothadcalculusthenitishelpfultodosomemoreworkwiththedatatablessotheyunderstandthatprofitismaximizedwhenmarginalrevenueequalsmarginalcost.Emphasizethattheperfectlypetitivefirmchoosesquantityandnotpriceinordertomaximizeprofit.Toputperfectpetitioninperspective,itcanalsobehelpfultog
7、iveabriefoverviewofmonopoly,oligopoly,andmonopolisticpetitionbeforepresentingtheassumptionsofperfectpetition.Restrictthisdiscussiontoidentifyinghowmanyfirmsareintheindustry,iftherearebarrierstoentry,productdifferentiation,andwhatassumptionsdoeseachfirmmakeabouthowtheotherfirmsintheindustrywillreactt
8、otheirpriceandquantitydecisions.Thiswillstimulatethestudentsinterestaboutupinglectures.Sections8.4and8.5furtherexplorethefirmsdecisiontoproducewherepriceisequaltomarginalcost,andshowthatthefirmssupplycurveisitsmarginalcostcurveaboveitsaveragevariablecostcurve.Althoughsomestudentswillunderstandrefere
9、ncestosecond-orderconditions,expecttobeaskedwhyq0inFigure8.3isnotprofitmaximizing,althoughMR=MC.Twoadditionalpointswarrantcarefulexplanation:1)whythefirmwouldremaininbusinessifthefirmsustainsalossintheshortrun,and2)thatmaximizingprofitisthesameasminimizingloss.Althoughthesummationoffirmsupplycurvesi
10、ntoamarketsupplycurveisstraightforward,theanalysisoflong-runpetitiveequilibriumisdifficult.Difficultconceptsinclude:* whyitmaybeoptimalforthefirmtoincurlossesintheshortrunbutnotthelongrun.* whyfreeentryandexitwillreduceeconomicprofittozerointhelongrun.* whypriceisequaltominimumaveragecostinthelongru
11、n.Itcanbehelpfultopresentanexample,algebraicandgraphical,whichstartsoutwithonlyonefirmintheindustrythatisearningpositiveeconomicprofit,andthenshowhowthemarketwillconvergeonitslongrunequilibriumpoint.Explorechangesinprice,quantityproduced,andthelevelofprofits,andrelatethechangestothefirmsbehavioralmo
12、tivations.ThischapterintroducestwootherimportanttopicsthatwillbeelaboratedoninChapter9:producersurplusandeconomicrent.Studentsfrequentlyconfuseprofit,producersurplus,andeconomicrent.REVIEWQUESTIONS1.Whywouldafirmthatincurslosseschoosetoproduceratherthanshutdown?Lossesoccurwhenrevenuesdonotcovertotal
13、costs.Revenuescouldbegreaterthanvariablecosts,butnottotalcosts,inwhichcasethefirmisbetteroffproducingintheshortrunratherthanshuttingdown,eventhoughtheyareincurringaloss.Thefirmshouldparetheleveloflosswithnoproductiontotheleveloflosswithpositiveproduction,andpicktheoptionthatresultsinthesmallestloss.
14、Intheshortrun,losseswillbeminimizedaslongasthefirmcoversitsvariablecosts.Inthelongrun,allcostsarevariable,andthus,allcostsmustbecoveredifthefirmistoremaininbusiness.2.Explainwhytheindustrysupplycurveisnotthelong-runindustrymarginalcostcurve.Intheshortrun,achangeinthemarketpriceinducestheprofit-maxim
15、izingfirmtochangeitsoptimallevelofoutput.Thisoptimaloutputoccurswhenpriceisequaltomarginalcost,aslongasmarginalcostexceedsaveragevariablecost.Therefore,thesupplycurveofthefirmisitsmarginalcostcurve,aboveaveragevariablecost.(Whenthepricefallsbelowaveragevariablecost,thefirmwillshutdown.)Inthelongrun,
16、thefirmadjustsitsinputssothatitslong-runmarginalcostisequaltothemarketprice.Atthislevelofoutput,itisoperatingonashort-runmarginalcostcurvewhereshort-runmarginalcostisequaltoprice.Asthelong-runpricechanges,thefirmgraduallychangesitsmixofinputstominimizecost.Thus,thelong-runsupplyresponseisthisadjustmentfromonesetofshort-runmarginalcostcurvestoanother.Notealsothatinthelongruntherewillbeentryandthefirmwillearnzeroprofit,sothatanylevelofoutputwh
