文档介绍：Chapter Twenty-Two
Firm Supply
Firm Supply
How does a firm decide how much product to supply? This depends upon the firm’s
technology
market environment
goals
competitors’ behaviors
Market Environments
Are there many other firms, or just a few?
Do other firms’ decisions affect our firm’s payoffs?
Is trading anonymous, in a market? Or are trades arranged with separate buyers by middlemen?
Market Environments
Monopoly: Just one seller that determines the quantity supplied and the market-clearing price.
Oligopoly: A few firms, the decisions of each influencing the payoffs of the others.
Market Environments
Dominant Firm: Many firms, but one much larger than the rest. The large firm’s decisions affect the payoffs of each small firm. Decisions by any one small firm do not noticeably affect the payoffs of any other firm.
Market Environments
petition: Many firms each making a slightly different product. Each firm’s output level is small relative to the total.
petition: Many firms, all making the same product. Each firm’s output level is small relative to the total.
Market Environments
Later chapters examine monopoly, oligopoly, and the dominant firm.
This chapter explores only petition.
petition
A firm in a petitive market knows it has no influence over the market price for its product. The firm is a market price-taker.
The firm is free to vary its own price.
petition
If the firm sets its own price above the market price then the quantity demanded from the firm is zero.
If the firm sets its own price below the market price then the quantity demanded from the firm is the entire market quantity-demanded.
petition
So what is the demand curve faced by the individual firm?