Economies of Scale, Imperfect Competition

Economies of Scale, Imperfect Competition

Chapter 6Economies of Scale, Imperfect Competition, and International Tradehttp://www.77cn.com.cn 中国建筑人才网

Economies of Scale, Imperfect Competition

In last section, We neglect price discrimination (such as dumping) in the imperfect competitive model which give rise international trade.

Economies of Scale, Imperfect Competition

Clips: 中国鞋如何迎战反倾销连环箭

Economies of Scale, Imperfect Competition

一、Dumping(倾销)1. The Economics of Dumping In reality, firms do not charge the same price for goods that are exported and sold domestically, it is the price discrimination. 1) Price discrimination: The practice of charging different customers different prices. Dumping is the most common form of price discrimination in international trade.4

Economies of Scale, Imperfect Competition

2) Definition of Dumping It is a pricing practice in which a firm charges a lower price for an exported good than it does for the same good sold domestically It is a controversial issue in trade policy and is widely regarded as an unfair practice in international trade.

Economies of Scale, Imperfect Competition

3) Dumping can occur only if two conditions are met: First, the industry must be Imperfectly competitive industry, so that firms set prices rather than taking prices as given. Second, market must be segmented, so that domestic residents cannot easily purchase goods intended for export(transport costs and protectionist trade barriers).6

Economies of Scale, Imperfect Competition

2. A monopolistic firm gets profits by dumping An example below help to show dumping can be a profit-maximizing strategy by Figure 6-8. To maximize profits, the firm must set marginal revenue equal to marginal cost in each market. We assume that the firm can sell as much as it wants at the PFOR in the foreign market.7

Economies of Scale, Imperfect Competition

Figure 6-8: DumpingCost, C and Price, P PDOM 3 MC PFOR 2 1 DFOR = MRFOR

DDOM MRDOM QDOM Domestic sales QMONOPOLY Exports8

Quantities produced and demanded, Q

Total output

Economies of Scale, Imperfect Competition

The firm sell QDOM in the domestic market and sell QMONOPOLY - QDOM in the foreign market . The quantity QDOM will be demanded domestically at price of PDOM , which is above the export price PFOR . Thus the firm is indeed dumping, selling more cheaply abroad than at Home.

Economies of Scale, Imperfect Competition

The reason the firm chooses to dump is the difference in the responsiveness of sales to price in the export and domestic markets(P143).

Economies of Scale, Imperfect Competition

3. Reciprocal Dumping 1) Reciprocal Dumping is a situation in which dumping leads to two-way trade in the same product. The reason is that if it tries to sell more it will drive down the price on its existing domestic sales. But dumping has the negative effect on the price of existing sales in the foreign sales.11

Economies of Scale, Imperfect Competition

2) It increases the volume of trade in goods that are not quite identical. 3) Its net welfare effect is ambiguous: It wastes resources in transportation. It creates some competition.

Economies of Scale, Imperfect Competition

Case studyThe dumping cases against China in 2005.

Economies of Scale, Imperfect Competition

世贸组织的一项报告显示，2005年上半 世贸组织的一项报告显示，2005年上半 年全球实施反倾销调查数量为96起 年全球实施反倾销调查数量为96起，去年同 期为106起 申请反倾销

措施的数量为53起 期为106起；申请反倾销措施的数量为53起， 去年同期为58起 其中21起反倾销调查和 起反倾销调查和24 去年同期为58起。其中21起反倾销调查和24 起反倾销措施由发达国家发起， 起反倾销措施由发达国家发起，去年同期分 别为40起和 起 起和23 别为40起和23起。 中国继续为被反倾销调查最频繁的国家， 中国继续为被反倾销调查最频繁的国家， 22起 去年同期为25起 其它依次为： 为22起，去年同期为25起；其它依次为：中 国台北9 去年同期14起 印度8 国台北9起，去年同期14起；印度8起，去年 同期5 美国7 去年同期8 同期5起；美国7起，去年同期8起14

Economies of Scale, Imperfect Competition

欧盟对中国化纤布反倾销税率高达56.2% 欧盟对中国化纤布反倾销税率高达56.2%我国纺织企业遭遇的最大一起国外反倾销案 终于尘埃落定。 第一财经日报》 终于尘埃落定。《第一财经日报》昨天从中国 纺织品进出口商会获悉，欧盟委员会发布第 纺织品进出口商会获悉， 1487/2005号公告 1487/2005号公告，对原产于中国的化纤布征收 号公告， 14.1%~56.2%的最终反倾销税，此公告自2005 14.1%~56.2%的最终反倾销税，此公告自2005 17日起生效 日起生效， 年9月17日起生效，所有进入欧盟的中国涉案产 品即日开始征收关税。 品即日开始征收关税。15

Economies of Scale, Imperfect Competition

商会有关负责人接受本报记者采访时表示， 商会有关负责人接受本报记者采访时表示， 终裁结果比2005年 15日初裁的结果理想很 终裁结果比2005年3月15日初裁的结果理想很 在本案中，49家涉案企业申请市场经济 多。在本案中，49家涉案企业申请市场经济 地位，其中有25家企业获得市场经济地位 家企业获得市场经济地位， 地位，其中有25家企业获得市场经济地位， 18家企业获得分别裁决，这是迄今为止在个 18家企业获得分别裁决 家企业获得分别裁决， 案中企业获得市场经济地位最多的案件。 案中企业获得市场经济地位最多的案件。 获得市场经济地位的企业税率由初裁时的 20%降为14.1%; 降为14.1% 20%降为14.1%;获得单独税率企业的终裁税 率从26.7% 46.4%不等 26.7%到 不等， 率从26.7%到46.4%不等，而原先初裁时是 26.7% 74.8%不等的单独税率； 26.7%到74.8%不等的单独税率；初裁时最 高税率为85.3%,现在下调到56.2%。 85.3%,现在下调到56.2 高税率为85.3%,现在下调到56.2%。16

Economies of Scale, Imperfect Competition

二、The Theory of External Economies(外部经济理论)As we pointed out early in this chapter, not all scale economies apply at the level of the individual firm. When economies of scale apply at the level of the industry rather than the level of the individual firm, they called external economies.

Economies of Scale, Imperfect Competition

1. What is the external economies Economies of scale that oc

cur at the level of the industry instead of the firm are called external economies. 2. There are three main reasons why a cluster of firms may be more efficient than an individual firm in isolation:18

Economies of Scale, Imperfect Competition

1) Specialized Suppliers(专业提供商) ( An individual company does not provide a large enough market for specialized equipment and services to keep the suppliers in business. A localized industrial cluster can solve this problem by bringing together many firms that provide a large enough market to support specialized suppliers.19

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