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CH06 Economies of Scale,Imperfect Competition, and International Trade.ppt

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CH06 Economies of Scale,Imperfect Competition, and International Trade.ppt

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CH06 Economies of Scale,Imperfect Competition, and International Trade.ppt

文档介绍

文档介绍:Chapter 6
Economies of Scale,petition, and International Trade
1
Introduction
Economies of Scale and International Trade: An Overview
Economies of Scale and Market Structure
The Theory of petition
petition and Trade
Dumping
The Theory of External Economies
External Economies and International Trade
Summary
anization
2
Introduction
Countries engage in international trade for two basic reasons:
Countries trade because they differ either in their resources or in technology.
Countries trade in order to achieve scale economies or increasing returns in production.
Two models of international trade in which economies of scale and petition play a crucial role:
petition model
Dumping model
3
Economies of Scale and International Trade: An Overview
Models of trade based parative advantage (. Ricardian model) used the assumptions of constant returns to scale and petition:
Increasing the amount of all inputs used in the production of modity will increase output of modity in the same proportion.
In practice, many industries are characterized by economies of scale (also referred to as increasing returns).
Production is most efficient, the larger the scale at which it takes place.
4
Under increasing returns to scale:
Output grows proportionately more than the increase in all inputs.
Average costs (costs per unit) decline with the size of the market.
Economies of Scale and International Trade: An Overview
5
Economies of Scale and International Trade: An Overview
Table 6-1: Relationship of Input to Output for a Hypothetical Industry
6
Economies of Scale and Market Structure
Economies of scale can be either:
External
The cost per unit depends on the size of the industry but not necessarily on the size of any one firm.
An industry will typically consist of many small firms and be petitive.
Internal
The cost per unit depends on the size of an individual firm but not necessarily on that of the industry.
The market structure will be petitive with large firms havi

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