Добавил:
ivanov666
Опубликованный материал нарушает ваши авторские права? Сообщите нам.
Вуз:
Предмет:
Файл:Competition theory. Учебное пособие.pdf
APPENDIX B
pp
pp
qq
ii
∆
=
∆
∆
=−
01.0
5,0
.02,0/ =∆ ðð
SAMPLE PROBLEMS
MARKET OF PERFECT COMPETITION
Let us assume that production of certain homogeneous
products is carried out by 10,000 enterprises, each of which has
a share of 0,01 % of the industrial output. Let’s assume that the
price elasticity of demand is e =-0,5. Then, if one of the enter-
prises decides to double the production volumes, the output of
the whole industry will increase by 0,01 %. Using the formula
of direct elasticity of demand (2.4), we will receive:
,
where
Thus, output doubling done by one of the enterprises of
the industry will lead to a fall in market price.
Accounting of network outer effects
while selling a product in the market
Let us assume that the producer X being a monopolist
has only four consumers to whom he or she sells the products,
two of them are law-abiding consumers that are legally pur-
chasing a product. The other two are ready to purchase a product illegally, but if they have no opportunity like that they
simply restrain from buying a product. Distribution of network
outer effects is shown in Table B.1
231
Table B.1
Number of consumers
1 2 3
4
Readiness to pay, monetary
units
Assessment of the usefulness of a product
by a certain consumer when the number
of consumers is increasing
100 150 200 250
Let's signify users as Nl who will legally purchase a
product, and NH as users who will use a product only illegally,
that is by copying it. N is the total quantity of users, N = Nl + NH.
If the monopoly protects a product, then:
Nl = 2, NH = 0, N = 2.
If the maximum price makes up 150 (in the case of two
buyers), the total sales of the monopoly are as follows:
TR = P x Q = 150 x 2 = 300.
If the monopoly does not protect a product, then:
Nl = 2, NH=2, N = 4.
However, when the maximum price of the four partici-
pants makes up 250, the total sales of the monopoly:
TR = P x Q = 250 x 2 = 500.
Therefore, we see that in this case it is much more profit-
able for a monopoly to stop protecting its product.
232
Let's assume that now we have two producers of one product: X and Y. One law-abiding consumer buys only the product X,
and the second — only the Y product. The network outer effects
in this case of two producers are shown in Table 12.1.
If both the producers protect the product, each of them
sells one item at a time and gains a gross income:
TR = P x Q = 100 x 1 = 100.
If the producer A protects the product, and the producer
B does not protect the product, A is still selling one item to the
consumer and gaining income:
TRB = P x Q = 100 x 1 = 100.
The producer B sells one item of the product to one con-
sumer, but at a price of 200 as its product is already being con-
sumed by three customers (a legal client and two illegal ones),
and its income is equal to:
TR = P x Q = 200 x l = 200.
Therefore, if all the firms protect the product, and one
firm refuses to do it, this firm can increase profit due to the
network outer effects.
Calculation of the efficiency of scientific
and technical activities of an enterprise
An enterprise making telecommunication technologies
was going to develop five new projects within four years. Only
three of them were successfully completed in due time: the pro-
ject "A" — for 7,340 euros of the actual costs, the project
"B" — for 8,360 euros of the actual costs, and the project
233
"C" — 8,410 euros. The other two projects were postponed.
5,
0
396844550
24150
)(
1
21
=
+
=
−−
=
∑
∑
=Ni
HHQi
R
r
∑
=
4
1i
Vp
Vi
Thus, it turned out that R = 24,150 euros.
The amount of risk-investments made during the first
year of the four-year period is 10,620 euros, during the second
one — 11,100 euros, during the third — 11,320 euros, and during the fourth — 11,510 euros. The total amount of riskinvestments turned out 44,550 euros for 4 years.
At the beginning of the analyzed period, the costs on the
transferring (incomplete) work turned out to be 16,980 euros,
and for the end — 13,012 euros.
For the period of four years, the actual productivity of the
scientific and technical activities of this enterprise can be found
out in the following way:
Сompetition intensity assessment
In the USA, during 1968–1984, there was applied a fourcomponent indicator characterizing competition force in the
industry:
CR4 =
≤ 0,75;
where Vi is the sales volume of the i-firm.
Vp is the size of the market of products of this assortment
group.
If CR4 〉 0.75, there were introduced restrictions against
mergers.
234
The indicator was also calculated for 8, 20 and 50 firms,
∑
2
=Ih
i
x
≤
3
к
= И ИрИдИт
respectively.
Example: let the market size be equal to 200 million US
dollars. We know the sales volumes of its four most major
companies: 80, 20, 40, 20 mln. dollars.
Is the market monopolized?
Since 1984, the Herfindal–Hershman index has been
applied:
,
where xi is a share in the market of the i-firm.
0 < Ih
1 (net monopoly)
If Ih > 0.18, it testifies to the low force of competition
and high concentration of the market.
Monopolistically safe is the market where several firms op-
erate, and the share of the largest firm cannot exceed 31 %, the
share of two largest ones can’t exceed 44 %, and the share of the
major three firms can’t exceed 54 %, and of four firms — 63 %.
Example: Twelve firms operate in the market. The shares
of the seven largest ones are known: they are 25 %, 15 %,
10 %, 12 %, 10 %, 12 %, 8 %, respectively.
Is the market monopolized?
The generalizing indicator of competition intensity is as
follows:
where Ir is the indicator of competition intensity taking into
account the profitability of the market;
Ir = 1 – P/Vr,
where P stands for the profit of the market,
235
Vp is the market size.
2
)/1()/1(n - 1 = Èä nÄn
i
−
∑
3
3
2964,0 =
65,0*57,0*8,0 Ик1=
Id is the indicator of competition intensity taking into account the shares of competitors in this market:
,
where n is the number of competing firms in this market of
goods,
Di is a share of the i-competitor in the market, profit
margin per unit.
It is the indicator of competition intensity considering the
growth rates of the sales volume:
It = (140 – Tr)/70,
where Tr — an annual increase rate of the sales volume (not-
withstanding inflation), %. 0 ≤ Ik <1 is to tend to zero.
Example: at the beginning of 2017, there were five firms
operating in the market of washing machines (their shares were
30 %, 25 %, 20 %, 15 %, 10 %, respectively). Their sales volume was 200 mln US dollars (in comparison with the previous
year it did not change).
In 2017, the market witnessed a new producer, which led
to an increase in sales volume (up to 240 mln US dollars) and a
decrease in market profitability (from 20 % to 16 %).
New market shares turned to be as follows: 25 %, 25 %,
15 %, 15 %, 10 %, 10 %, respectively.
It is necessary to estimate the changes in competition
intensity.
Solution:
Ik1 =
Ir = 1 – 0,2 = 0,8; It = (140 – 100)/70 = 0,57
236
=−+−+−+−+− ))5/11,0()5/115,0()5/12,0()5/125,0()5/13,0((*5/1 -1=Ид
22222
0,65 =025,0*5/1*5-1 =
3
3
148,0*70/)120140(*84,0 = Ик2 =− Ид
.
Ik2 <Ik1, which means that the competition increased.
Micro-economic models of competition
The firm operates within an oligopoly and its demand
function is a broken-line one:
P1 = 85 – Q1;
P2 = 130 – 4Q2.
The total costs of the firm: = 375 + 25 Q + 0,6 Q2.
We have to find out: the production volume, the price and
profit of the firm at the breakpoint.
Solution:
85 – Q = 130 – 4 Q;
3 Q = 45;
Q = 15;
Р = 85-15 = 70;
π
= 15*70 – 375 – 25*15 – 0,6*152 = 165.
We know the demand function and the function of the to-
tal costs of the firm:
TC = 500 000 +400 Q;
Q = 2 500 – 0.5 P.
We have to find out:
• the production volume and the price corresponding to
the maximum profit;
• profit at the optimum production volume;
• profit at the maximum sales volume.
Solution:
1) MR = MC, TR’ = TC’;
(Q * (5000-2Q))’ = 400;
5000 – 4Q = 400;
237
Q = 1150;
P = 5000-2Q = 5000 – 2*1150 = 2 700;
2) π= TR – TC = 2700*1150 – 500000 – 400*1150 =
= 2145000;
3) MR = 0, 5000 = 4 Q;
Q = … = 1250;
P = … = 2 500;
π
= 2605000.
An enterprise publishes books. Average costs on producing one book are $4 + 7000$/Q, where Q is an annual production. The planned price is $8.
We have to find out the annual size of circulation corre-
sponding to the breakeven point.
8 Q – 4 Q – 7 000 = 0;
4 Q = 7000;
Q = 1750.
238
THE SUBJECTS OF STUDENTS’ PAPERS
1. Transnational corporations and their competitive
advantages.
2. Privatization and decentralization; their influence on
competition promotion in the Republic of Belarus.
3. The stock market of high-tech firms in developed
countries and in Belarus.
4. Developmental perspectives of Belarusian companies.
5. The antitrust law in Belarus and its influence on com-
petition promotion and competition mainstreaming.
6. Competitive advantages of a firm.
7. A competitive potential of the production output.
8. The innovation and competitive strategies of
corporations.
9. Competition in international markets.
10. The basics of competing on a global scale.
11. National interests of the Republic of Belarus.
12. Problems of reforming unforced monopolies.
13. Economic trends of the Republic of Belarus.
14. Analyzing the competitive potential of the Republic
of Belarus.
15. Methods to investigate rival firms.
16. An information economy and competitive strategies.
17. Problems that Belarusian enterprises face when
managing foreign economic activity.
18. Benchmarking as a new direction in business
appraisals.
19. Peculiarities of the state regulation in developed
countries.
20. Using IT technologies at enterprises.
21. Competitive intelligence.
APPENDIX C
239
22. Protection of national interests of Belarusian
producers in a foreign market.
23. The Republic of Belarus under the conditions of the
economic globalization: strategic and safety issues.
24. Increase in competitiveness of the Belarusian
economy as an safety important condition.
240