BUAD 5500, Topic 4

268 views

Published on

Notes for Topic 4, BUAD 5500, Spring 2013

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
268
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

BUAD 5500, Topic 4

  1. 1. Market Failure and the Government Spring 2013 Topic 4
  2. 2. Perfect competitionMany actorsHomogenous productsNo barriers to entry or exitSymmetric informationNo external benefits or costs
  3. 3. Why is this desirable?Consumer surplus
  4. 4. Why is this desirable?Consumer surplusProducer surplus
  5. 5. Why is this desirable?Consumer surplusProducer surplusMarket efficiency
  6. 6. Violation 1: externalities Negative Consumption Production
  7. 7. Violation 1: externalities Negative Positive Consumption Production
  8. 8. Violation 1: externalities Negative Positive Potential solutions Fixed limits
  9. 9. Violation 1: externalities Negative Positive Potential solutions Taxation Tax incidence
  10. 10. Violation 1: externalities Negative Positive Potential solutions Ownership and tradable rights
  11. 11. Violation 2: public goods Non-rival Non-excludable
  12. 12. Violation 2: public goods Non-rival Non-excludable Solutions
  13. 13. Violation 3: asymmetric information The market for lemons Adverse selection
  14. 14. Violation 3: asymmetric information The market for lemons Adverse selection Possible solutions Secondary information markets Forced consumption
  15. 15. Violation 4: imperfect competitionMonopoly powerPricing decisions MR and demand curve
  16. 16. Violation 4: imperfect competitionMonopoly powerPricing decisionsMonopoly and PC outcomes compared Dead weight loss
  17. 17. Violation 4: imperfect competitionTypes of imperfect competition Monopoly Oligopoly Monopolistic competition
  18. 18. Violation 4: imperfect competitionTypes of imperfect competitionSources of imperfect competition Limited resource
  19. 19. Violation 4: imperfect competitionTypes of imperfect competitionSources of imperfect competition Government policies Patents Copyright Licensing requirements
  20. 20. Violation 4: imperfect competitionTypes of imperfect competitionSources of imperfect competition Natural monopolies
  21. 21. Violation 4: imperfect competitionTypes of imperfect competitionSources of imperfect competition Non-homogenous goods
  22. 22. Violation 4: imperfect competitionSolutions Anti-trust Approaches Consumer harm Strict size limits “Chicago School”
  23. 23. Violation 4: imperfect competitionSolutions Anti-trust Market regulation

×