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.
Offered By
Microeconomics: When Markets Fail
University of Pennsylvania
About this Course
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Learner Career Outcomes
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started a new career after completing these courses
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got a tangible career benefit from this course
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Skills you will gain
ExternalityEconomicsMicroeconomicsMarket (Economics)
Learner Career Outcomes
50%
started a new career after completing these courses
25%
got a tangible career benefit from this course
14%
got a pay increase or promotion
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Approx. 12 hours to complete
English
Subtitles: English, Mongolian
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.
Syllabus - What you will learn from this course
1 hour 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.
1 hour to complete
20 videos (Total 45 min), 1 reading, 3 quizzes
20 videos
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 Profits10m
1.2: Perfect Competition: Definition and Output12m
1.3: Perfect Competition: Implications for Efficiency6m
1 hour 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.
1 hour to complete
13 videos (Total 39 min)
13 videos
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 definition8m
2.2: Monopoly vs. Perfect Competition Numerical example14m
1 hour 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.
1 hour to complete
14 videos (Total 39 min)
14 videos
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 Monopoly14m
3.2: Price Discriminating Monopoly10m
3.3 Monopolistic Competition8m
2 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.
2 hours to complete
20 videos (Total 52 min)
20 videos
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: Externalities10m
4.2: Solutions to Externalities12m
4.3: Public Goods10m
4.4: Solutions to Public Goods10m
Reviews
4.8
TOP REVIEWS FROM MICROECONOMICS: WHEN MARKETS FAIL
by JRJan 13, 2018
Great and relevant content, presented in an interesting and easy way; allowing the student to go through the video materials in an individual pace and thus optimize the study sessions.
by NPAug 11, 2018
I really appreciated the short form videos and abundant visual examples. I would take MANY more classes on Coursera if it were guaranteed that they would follow this format.
by DVOct 23, 2018
Love how the videos were brief, but informative. Very helpful class and exams weren't overly complicated. In the end, I felt as though I retained much of the knowledge.
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.
by VRMay 23, 2017
I came here for the videos! Extremely concise and accurate. Very good for reviewing material. I speak from the level of an HL Economics student in the IB.
by VSOct 12, 2019
Very educating, interesting, and knowledge gaining. I appreciate for providing this course. Seek many more such modules of the whole economics subject.
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 SMJun 29, 2017
Way of presentation is too good.\n\nBeautiful and simple language\n\nappropriate examples\n\nMa'am makes every topic simple
by JPFeb 11, 2018
Congratulations to professor Rebecca Stein, this course helps me to understand many concepts to improve my lifestyle!
by PDJan 1, 2019
Very helpful and informative class.... liked the challenge of getting my microeconomics view back in order...
by JCMar 14, 2019
Course material was very accessible and engaging to learn, thanks Dr.Stein!
by SKFeb 10, 2017
Provided with good basics on Microeconomics. Thoroughly enjoyed the course.
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