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559 ratings

Rebecca Stein

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Microeconomics: When Markets Fail

University of Pennsylvania

About this Course

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Perfect markets achieve efficiency: maximizing total surplus generated. But real markets are imperfect. In this course we will explore a set of market imperfections to understand why they fail and to explore possible remedies including as antitrust policy, regulation, government intervention. Examples are taken from everyday life, from goods and services that we all purchase and use. We will apply the theory to current events and policy debates through weekly exercises. These will empower you to be an educated, critical thinker who can understand, analyze and evaluate market outcomes.

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Earn a Certificate upon completion

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Approx. 12 hours to complete

English

Subtitles: English, Mongolian

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Skills you will gain

Externality
Economics
Microeconomics
Market (Economics)

Flexible deadlines

Reset deadlines in accordance to your schedule.

Shareable Certificate

Earn a Certificate upon completion

100% online

Start instantly and learn at your own schedule.

Approx. 12 hours to complete

English

Subtitles: English, Mongolian

Could your company benefit from training employees on in-demand skills?

Try Coursera for Business

Instructor

Instructor rating

4.78/5 (75 Ratings)

Rebecca Stein

Offered by

University of Pennsylvania

The University of Pennsylvania (commonly referred to as Penn) is a private university, located in Philadelphia, Pennsylvania, United States. A member of the Ivy League, Penn is the fourth-oldest institution of higher education in the United States, and considers itself to be the first university in the United States with both undergraduate and graduate studies.

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Syllabus - What you will learn from this course

Content Rating95%(1,646 ratings)

Week

Week 1

3 hours to complete

Costs and Profits + Perfect Competition

In the first part of the course we learnt that if we allow market forces to work we reach an efficient outcome: the maximum benefit that can be generated by a market. The second part of the course explores cases where the markets fail to accomplish our goals. This week sets up the benchmark case of the perfectly competitive market: a model we will modify in the next few weeks. We define Perfect Competition, learn to model it graphically and discuss some key results in terms of long run profits and implications for efficiency.

3 hours to complete

20 videos (Total 45 min), 1 reading, 3 quizzes

20 videos

1.1.0: When Markets Fail: Introduction1m

1.1.1: Defining Profits1m

1.1.2: Defining Fixed Costs and Variable Costs2m

1.1.3: Marginal Productivity2m

1.1.4: Marginal Productivity: Definition1m

1.1.5: Marginal Cost1m

1.1.6: Average Cost2m

1.1.7: Graph of Marginal and Average Cost Curves1m

1.2.1: Perfect Competition: Definition5m

1.2.2: Profit Maximization Perfect Competition2m

1.2.3: Profit Maximization: MR=MC3m

1.2.4: Profit Maximizations vs. Making Profits2m

1.2.5: Profit Maximization: The Case of Losses2m

1.2.6: Perfect Competition: The Firm's Supply Curve REPLACE1m

1.2.7: Definition of Short Run vs. Long Run1m

1.3.1: Perfect Competition: Firm Entry When Profits are Positive2m

1.3.2: Perfect Competition: Firm Entry When Profits are Negative1m

1.3.3: Perfect Competition: An Efficient Outcome2m

1.3.4: Perfect Competition: In The Long Run2m

1.3.5: Perfect Competition: An Efficient Outcome Pt 21m

1 reading

Participate in a Purdue Research Project (Optional)10m

3 practice exercises

1.1: Costs and Profits30m

1.2: Perfect Competition: Definition and Output30m

1.3: Perfect Competition: Implications for Efficiency30m

Week

Week 2

2 hours to complete

Monopoly

A monopoly is a case where there is only one firm in the market. We will define and model this case and explain why market power is good for the firm, bad for consumers. We will also show that society as a whole suffers from the lack of competition.

2 hours to complete

13 videos (Total 39 min)

13 videos

2.1.1 Monopoly: Definition1m

2.1.2: The Monopoly as a Price Setter2m

2.1.3 Marginal Revenue vs Price: Numerical Example2m

2.1.4 Marginal Revenue vs Price: Graphical Example2m

2.1.5 Marginal Revenue vs Price: Example Using Calculus1m

2.1.6 Profit Maximization in a Monopoly2m

2.1.7 Profit Maximization in a Monopoly: Numerical Example4m

2.2.1 Monopoly vs Perfect Competition6m

2.2.2 Efficiency loss under a Monopoly2m

2.2.3 Monopoly vs Perfect Competition: Numerical Example5m

2.2.4 Monopoly vs Perfect Competition: Example of Dead Weight Loss2m

2.2.5 Monopoly vs Perfect Competition: Summary1m

2.2.6 Why do we allow monoplies?3m

2 practice exercises

2.1: Monopoly definition30m

2.2: Monopoly vs. Perfect Competition Numerical example30m

Week

Week 3

2 hours to complete

Monopoly Continued

Monopolies come in various types: one price monopoly, natural monopoly, price discrimination and monopolistic competition. This week we will expand the basic monopoly model to cover these cases and then explore market outcomes in each case. We will also discuss how government may intervene in such cases to benefit society as a whole and increase the surplus generated by the market.

2 hours to complete

14 videos (Total 39 min)

14 videos

3.1.1 Natural Monopoly: Definition1m

3.1.2 Government Regulation and Antitrust Law2m

3.1.3 Natural Monopoly: Implications for the Average Total Cost3m

3.1.4 Natural Monopoly: Graphical Presentation1m

3.1.5 Natural Monopoly: Profit Maximizing Outcome4m

3.1.6 Natural Monopoly: Regulation though Marginal Cost Pricing3m

3.1.7 Natural Monopoly: Regulation though Average Cost Pricing3m

3.2.1 Price Discrimination: Definition3m

3.2.2 Price Discrimination: Graphical Example4m

3.3.1 Monopolistic Competition: Definiton2m

3.3.2 Monopolistic Competition: Core Results1m

3.3.3 Monopolistic Competition: Graphical Presentation in the Short Run3m

3.3.4 Monopolistic Competition: Graphical Presentation in the Long Run1m

3.3.5 Monopolistic Competition: Mark up and Excess Capacity2m

3 practice exercises

3.1: Natural Monopoly30m

3.2: Price Discriminating Monopoly30m

3.3 Monopolistic Competition30m

Week

Week 4

3 hours to complete

Externalities + Public Goods

Two classic cases of market failure will be defined and explored: externalities and public goods. We will define each case, demonstrate why the market fails to provide the efficient outcome and suggest interventions through either marked design or regulation.

3 hours to complete

20 videos (Total 52 min)

20 videos

4.1.1: Externalities: Definition5m

4.1.2: Externalities: Allocative Efficiency: Refresher1m

4.1.3: Negative Externalities: Implications for Efficiency4m

4.1.4: Positive Externalities: Implications for Efficiency3m

4.1.5: The Coase Theorem2m

4.1.6: Interalizing a Negative Externality via a Per Unit Tax2m

4.1.7: Interalizing a Positive Externality via a Per Unit Subsidy1m

4.2.1: Externalities: A Numerical Example2m

4.2.2: Interalizing a Negative Externality via Tax: A Numerical Example4m

4.2.3 Government Intervention in the Case of Externalities2m

4.2.4 Externality: Conclusion1m

4.3.1 Pure Public Goods: Nonexcludable and Nonrival2m

4.3.2: Examples of Different Types of Goods4m

4.3.3: Implications of Nonexcludability2m

4.3.4: Free Riding1m

4.3.5: Implications of Nonrivalness1m

4.4.1: The Role of the Government in Providing Public Goods1m

4.4.2: Provision of Public Good by the Government2m

4.4.3: Free Riding as a Prisoners' Dilemma3m

4.4.4: Public Goods Conclusion1m

4 practice exercises

4.1: Externalities30m

4.2: Solutions to Externalities30m

4.3: Public Goods30m

4.4: Solutions to Public Goods30m

Reviews

4.8

122 reviews

5 stars
80.39%
4 stars
15.68%
3 stars
3.38%
2 stars
0.17%
1 star
0.35%

TOP REVIEWS FROM MICROECONOMICS: WHEN MARKETS FAIL

by SMMar 9, 2021

Rebecca is knowledgeable and explains very clearly. Great teacher and great course. I’d love another course and more numerical exercises if possible. Great course, thanks!!

by HTApr 23, 2021

The course is best for those who are beginners to Microeconomics. I had no idea of Microeconomics. This course has given me confidence to start my journey to start learning more. Thanks

by OBSep 17, 2017

The course material is clear and easy to follow, and the questions are just tricky enough to be interesting without breaking my brain.

by LEOct 20, 2016

Another fine course from Professor Stein. I particularly appreciated the final set of lectures, but all were well presented, understandable, and relevant.

View all reviews

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Microeconomics: When Markets Fail

Microeconomics: When Markets Fail

About this Course

Skills you will gain