andInternationalTrade(发展经济学厦门大学,陈涛.pptx

Chapter 6Economies of Scale,Imperfect Competition, and International TradeChapter OrganizationIntroductionEconomies of Scale and International Trade: An OverviewEconomies of Scale and Market StructureThe Theory of Imperfect CompetitionMonopolistic Competition and TradeDumpingThe Theory of External EconomiesExternal Economies and International TradeSummaryIntroductionCountries 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 imperfect competition play a crucial role:Monopolistic competition modelDumping modelEconomies of Scale and International Trade: An OverviewModels of trade based on comparative advantage (e.g. Ricardian model) used the assumptions of constant returns to scale and perfect competition: Increasing the amount of all inputs used in the production of any commodity will increase output of that commodity 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. Economies of Scale and International Trade: An OverviewUnder 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 OverviewTable 6-1: Relationship of Input to Output for a Hypothetical IndustryEconomies of Scale and Market StructureEconomies of scale can be either:ExternalThe 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 perfectly competitive.Internal The cost per unit depends on the size of an individual firm but not necessarily on that of th