Consumer - mikroekonomia.net
Transcription
Consumer - mikroekonomia.net
Instytut Ekonomii Competition from the market actors’ point of view of Prof. Tomasz Bernat Microeconomics Department Institut of Economics kontak@tomaszbernat.pl Instytut Ekonomii Basic questions: • Is competition strictly define in theory and practice? • What consumers need from the market? • Is competition good for companies? • What is better for society: competition or regulation? Slajd nr 2 Instytut Ekonomii Paradoxes of competition Slajd nr 3 Instytut Ekonomii Paradox 1 • Competition is the chase of happiness through individual competition, selfishness leads to the achievement of universal happiness. – Basic case: A. Smith about invisible hand of market Slajd nr 4 Instytut Ekonomii Paradox 2 • Competition at the same time creates wealth and poverty – Basic case: free market economy vs. steering economy (socialism) Slajd nr 5 Instytut Ekonomii Paradox 3 • Competition means that we as individuals (people, firms) can have more, but get finally less – Basic case: more firms on a single market means less place for single company Slajd nr 6 Instytut Ekonomii Paradox 4 • Companies compete to reduce competition – Basic case: the history of Standard Oil and others big companies Slajd nr 7 Instytut Ekonomii Paradox 5 • In the political sphere, both the right and the left say a lot about the fight against monopolies, but practically nobody does anything in order to prevent concentration • Basic case: political discussion before any election Slajd nr 8 Instytut Ekonomii Paradox 6 • Nobody would deny that a degree of competition is positive – Basic case: huge taxes paid every year by global companies Slajd nr 9 Instytut Ekonomii Paradox 7 • The intense of today’s competition in global era is a far cry from this old ideal – Basic case: compertition from A. Smith ideas and global competition Slajd nr 10 Instytut Ekonomii Paradox 8 • Competition in short-run has come to be seen as an answer to almost all economic ills – Basic case: Is there a worsening unemployment problem? Then what is needed is to become more competitive. Slajd nr 11 Instytut Ekonomii Competition, groups and objectives Consumers Companies State (government) Slajd nr 12 Instytut Ekonomii Consumer • Who is consumer? – It is the natural person who takes legal action not directly related to its business or professional activity. – The consumer is the one who pays to consume goods and services produced Slajd nr 13 Instytut Ekonomii The role of the consumer • Consumers play a vital role in the economic system of a nation. • Without consumer demand, producers would lack one of the key motivations to produce: to sell to consumers. • The consumer are part of the chain of distribution. Slajd nr 14 Instytut Ekonomii Consumer • The objectives of the consumers, referred to consumer theory (choice theory) is: – To maximize the desirability of their consumption by maximizing utility subject to a consumer budget constraint. • How to understand this? Slajd nr 15 Instytut Ekonomii Should be consumer protected? • Legal rationale for protecting the consumer is based on the notion of policing market failures and inefficiencies, such as inequalities of bargaining power between a consumer and a business Slajd nr 16 Instytut Ekonomii Economic point of view • The answer is perfect competition! Slajd nr 17 Instytut Ekonomii Perfect competition • Gives to consumer – The lowest price – The biggest amount of good Slajd nr 18 Instytut Ekonomii What is a firm? • A business, also known as an enterprise or a firm, is an organization involved in the provision of goods, services, or both to consumers. • Businesses may also be not-for-profit or stateowned. • A business owned by multiple individuals may be referred to as a company. Slajd nr 19 Instytut Ekonomii The role of producers Slajd nr 20 Instytut Ekonomii Basic objectives • • • • Maximalisation of the production Maximalisation of the profit Maximalisation of the company value Others… Slajd nr 21 Instytut Ekonomii Should be company protected? • To protect or not to protect? this is a question! • Ansewer: – No, the competion shell be only the one right! Slajd nr 22 Instytut Ekonomii Economic point of view • Bigger power – bigger market! • The lowest level of competition! • Monopoly is the best! Slajd nr 23 Instytut Ekonomii Perfect monopoly as a roadsign • Gives to companies – The biggest possible price – The lowest amount of good Slajd nr 24 Instytut Ekonomii OK, but where is the state? Slajd nr 25 Instytut Ekonomii What is state? • State (polity), an organized political community living under a single system of government Slajd nr 26 Instytut Ekonomii The state – basic systems • Capitalism and market economy • Socialism and driven economy • Something between: social market economy Slajd nr 27 Instytut Ekonomii Basic objectives of state • The most important question: – How strong a role the government should have in both guiding the market economy and addressing the inequalities the market produces • To guide or not to guide the market? Slajd nr 28 Instytut Ekonomii Should be state protected or should state protect? • Who should protect the state? • Is it possible? How? • What state should protect? – Consumers? – Companies? – Others? Slajd nr 29 Instytut Ekonomii The quest: what concern the text below? • Detailed objectives are: – an area of freedom, security and justice without internal frontiers; – an internal market where competition is free and undistorted; – sustainable development, based on balanced economic growth and price stability; – a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment; Slajd nr 30 Instytut Ekonomii Economic point of view • market where competition is free and undistorted (better position of consumers) • highly competitive social market economy (strong companies) • full employment • free and fair trade • other Slajd nr 31 Instytut Ekonomii Conclusion’s question •What level of competition is good? Slajd nr 32 Instytut Ekonomii Thank you for your attention! Slajd nr 33