Академический Документы
Профессиональный Документы
Культура Документы
CHAPTER 14
A Manager’s Guide to Government in the Learning Objectives
Marketplace 1. Identify four sources of market failure.
2. Explain why market power reduces social welfare, and identify two
types of government policies aimed at reducing deadweight loss.
3. Show why externalities can lead competitive markets to provide
socially inefficient quantities of goods and services; explain how
government policies, such as the Clean Air Act, can improve resource
allocation.
4. Show why competitive markets fail to provide socially efficient levels
of public goods; explain how the government can mitigate these
inefficiencies.
5. Explain why incomplete information compromises the efficiency of
markets, and identify five government policies aimed at mitigating
these problems.
6. Explain why government attempts to solve market failures can lead
to additional inefficiencies because of “rent-seeking” activities.
7. Show how government policies in international markets, such as
quotas and tariffs, impact the prices and quantities of domestic
goods and services.
© 2017 by McGraw-Hill Education. All Rights Reserved. Authorized only for instructor use in the classroom. No reproduction or distribution without the prior written consent of McGraw-Hill Education. © 2017 by McGraw-Hill Education. All Rights Reserved. 2
1
19/12/2019
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-7 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-8
Market Failure
Antitrust Policy: Market Failure
2
19/12/2019
Effective demand
Demand
MR
𝑄𝑀 𝑄𝐶 Quantity
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-15 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-16
MC
𝑃𝑀 𝑃𝑀
𝑃∗ Regulated price
Demand Demand
MR MR
𝑄𝑅 𝑄𝑀 𝑄∗ Quantity 𝑄𝑀 𝑄𝐶 Quantity
Shortage
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-17 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-18
3
19/12/2019
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-19 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-20
environment.
• The Clean Air Act causes firms to internalize the Demand
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-21 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-22
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-23 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-24
4
19/12/2019
𝑀𝐶 of
54 𝑀𝐶of streetlights 54 streetlights A’s consumer
surplus from = $85.50
free-riding
Total demand for streetlights Total demand
30 by B and C
30
27 27
Individual consumer surplus = $72
30 A’s demand
B’s and C’s for streetlights
18 Individual demand for streetlights individual demand
0 3 30 Quantity 3 30 Quantity
0 12 30 Quantity of of streetlights of streetlights
streetlights
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-25 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-26
𝑄𝑀 𝑄𝐶 Quantity
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-29 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-30
5
19/12/2019
Government Policy and International Markets Government Policy and International Markets
Quotas The Impact of a Foreign Import Quota
• A quota is a government restriction that limits on the Domestic Market
Price 𝑆 𝐹 Quota 𝑆𝐹𝑜𝑟𝑒𝑖𝑔𝑛
the quantity of imported goods that can legally
enter the country. 𝑆 𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐
𝑆 𝑄𝑢𝑜𝑡𝑎
– Implications: E
Market supply
after quota
• Reduces competition in domestic market 𝑃𝐷 M 𝑆 𝐹+𝐷
𝑃𝑄𝑢𝑜𝑡𝑎 Market supply
A K
• Higher domestic prices 𝑃𝐹+𝐷
before quota
Government Policy and International Markets Government Policy and International Markets
Tariffs Impact of a Lump-Sum Tariff on a
• A tariff is designed to limit foreign competition Foreign Firm
Price
in the domestic market to benefit domestic Average cost
After lump-sum tariff
Average cost MC AC2
producers, which accrue at the expense of before
lump-sum tariff
domestic consumers and foreign producers. AC1
– Lump-sum tariff: fixed fee that foreign firms must 𝑃2
pay the domestic government to be able to sell in
the domestic market. 𝑃1
Government Policy and International Markets Government Policy and International Markets
Impact of a Lump-Sum Tariff on Impact of an Excise Tariff on Market
Market Supply Supply
Price 𝑆𝐹𝑜𝑟𝑒𝑖𝑔𝑛 Price 𝑆 𝐹+𝑇
𝑆𝐹
𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐
Supply after
𝑆 excise tax
𝑆𝐷
𝑆 𝐹+𝐷
A
𝑆 𝐹+𝐷+𝑇
𝑃2
E 𝑆 𝐹+𝐷
C
Market supply curve H
after lump-sum tariff
𝐸 B
Demand
Market supply curve Supply before
before lump-sum tariff A excise tax
Quantity in the Quantity in the
domestic market domestic market
© 2017 by McGraw-Hill Education. All Rights Reserved. 14-35 © 2017 by McGraw-Hill Education. All Rights Reserved. 14-36