1. Copyright 2000 Addison-Wesley Longman PART 1 ECONOMIC THEORY,CONCEPTS, AND METHODS

2. Copyright 2000 Addison-Wesley Longman CHAPTER 1 COMPETITION, MONOPOLY, AND SOCIAL WELFARE

3. Copyright 2000 Addison-Wesley Longman FIGURE 1.1 Competitive Market: Marginal Cost = Price at $16 per barrel and Output is 22 billion barrels

4. Copyright 2000 Addison-Wesley Longman FIGURE 1.2 Monopolistic Industry: Maximum Profit Restricts Annual Output to 12.69 billion barrels

5. Copyright 2000 Addison-Wesley Longman FIGURE 1.3 The Monopoly Optimum: Marginal Revenue=Marginal Cost at an Output level of 12.69 billion barrels and Price is $34.62 per barrel

6. Copyright 2000 Addison-Wesley Longman FIGURE 1.4 Crude Oil Prices 1950-1998: Deflated prices, 1998 dollars

7. Copyright 2000 Addison-Wesley Longman

9. FIGURE 1.5 The Social Optimum: Price=Marginal Social Cost at $27 per barrel and Output Is 16.5 billion barrels

10. Copyright 2000 Addison-Wesley Longman FIGURE 1.6 Consumer Value Is the Total Value to All Consumers

11. Copyright 2000 Addison-Wesley Longman FIGURE 1.7 Willingness to Pay: Social Value=Consumer Value

12. Copyright 2000 Addison-Wesley Longman FIGURE 1.8 Competition Maximizes Consumer and Producer Surplus

13. Copyright 2000 Addison-Wesley Longman