Tsinghua_2005MBA_Lecture_03(Individual and Market Demand(ppt 93页)(英文).ppt

Lecture3 IndividualandMarketDemand Chapter4 Slide2 TopicstobeDiscussed IndividualDemandIncomeandSubstitutionEffectsMarketDemandConsumerSurplus Chapter4 Slide3 TopicstobeDiscussed NetworkExternalitiesEmpiricalEstimationofDemand Chapter4 Slide4 IndividualDemand PriceChangesUsingthefiguresdevelopedinthepreviouschapter theimpactofachangeinthepriceoffoodcanbeillustratedusingindifferencecurves Chapter4 Slide5 EffectofaPriceChange Food unitspermonth Clothing unitspermonth Chapter4 Slide6 Price ConsumptionCurve EffectofaPriceChange Food unitspermonth Clothing unitspermonth 4 5 6 U2 U3 A B D U1 4 12 20 Theprice consumptioncurvetracesouttheutilitymaximizingmarketbasketforthevariouspricesforfood Chapter4 Slide7 EffectofaPriceChange Food unitspermonth PriceofFood Chapter4 Slide8 IndividualDemand TwoImportantPropertiesofDemandCurves1 Thelevelofutilitythatcanbeattainedchangesaswemovealongthecurve TheIndividualDemandCurve Chapter4 Slide9 IndividualDemand TwoImportantPropertiesofDemandCurves2 Ateverypointonthedemandcurve theconsumerismaximizingutilitybysatisfyingtheconditionthattheMRSoffoodforclothingequalstheratioofthepricesoffoodandclothing TheIndividualDemandCurve Chapter4 Slide10 EffectofaPriceChange Food unitspermonth PriceofFood Chapter4 Slide11 IndividualDemand IncomeChangesUsingthefiguresdevelopedinthepreviouschapter theimpactofachangeintheincomecanbeillustratedusingindifferencecurves Chapter4 Slide12 EffectsofIncomeChanges Food unitspermonth Clothing unitspermonth Anincreaseinincome withthepricesfixed causesconsumerstoaltertheirchoiceofmarketbasket Assume Pf 1Pc 2I 10 20 30 Chapter4 Slide13 EffectsofIncomeChanges Food unitspermonth Priceoffood Anincreaseinincome from 10to 20to 30 withthepricesfixed shiftstheconsumer sdemandcurvetotheright Chapter4 Slide14 IndividualDemand IncomeChangesTheincome consumptioncurvetracesouttheutility maximizingcombinationsoffoodandclothingassociatedwitheveryincomelevel Chapter4 Slide15 IndividualDemand IncomeChangesAnincreaseinincomeshiftsthebudgetlinetotheright increasingconsumptionalongtheincome consumptioncurve Simultaneously theincreaseinincomeshiftsthedemandcurvetotheright Chapter4 Slide16 IndividualDemand IncomeChangesWhentheincome consumptioncurvehasapositiveslope Thequantitydemandedincreaseswithincome Theincomeelasticityofdemandispositive Thegoodisanormalgood NormalGoodvs InferiorGood Chapter4 Slide17 IndividualDemand IncomeChangesWhentheincome consumptioncurvehasanegativeslope Thequantitydemandeddecreaseswithincome Theincomeelasticityofdemandisnegative Thegoodisaninferiorgood NormalGoodvs InferiorGood Chapter4 Slide18 AnInferiorGood Hamburger unitspermonth Steak unitspermonth Chapter4 Slide19 IndividualDemand EngelCurvesEngelcurvesrelatethequantityofgoodconsumedtoincome Ifthegoodisanormalgood theEngelcurveisupwardsloping Ifthegoodisaninferiorgood theEngelcurveisdownwardsloping Chapter4 Slide20 EngelCurves Food unitspermonth 30 4 8 12 10 Income permonth 20 16 0 Chapter4 Slide21 EngelCurves Food unitspermonth 30 4 8 12 10 Income permonth 20 16 0 ConsumerExpendituresintheUnitedStates Entertainment70094712741514205426544300OwnedDwellings1116172522533243445457939898RentedDwellings1957217023712536213715401266HealthCare1031169719181820205222142642Food2656338541094888542962208279Clothing85997813631772177826143442 ExpenditureLessthan1 000 20 000 30 000 40 000 50 000 70 000 on 10 00019 00029 00039 00049 00069 000andabove IncomeGroup 1997 Chapter4 Slide23 IndividualDemand 1 Twogoodsareconsideredsubstitutesifanincrease decrease inthepriceofoneleadstoanincrease decrease inthequantitydemandedoftheother e g movieticketsandvideorentals SubstitutesandComplements Chapter4 Slide24 IndividualDemand 2 Twogoodsareconsideredcomplementsifanincrease decrease inthepriceofoneleadstoadecrease increase inthequantitydemandedoftheother e g gasolineandmotoroil SubstitutesandComplements Chapter4 Slide25 IndividualDemand 3 Twogoodsareindependentwhenachangeinthepriceofonegoodhasnoeffectonthequantitydemandedoftheother SubstitutesandComplements Chapter4 Slide26 IndividualDemand SubstitutesandComplementsIfthepriceconsumptioncurveisdownward sloping thetwogoodsareconsideredsubstitutes Ifthepriceconsumptioncurveisupward sloping thetwogoodsareconsideredcomplements Theycouldbeboth Chapter4 Slide27 IncomeandSubstitutionEffects Afallinthepriceofagoodhastwoeffects Substitution IncomeSubstitutionEffectConsumerswilltendtobuymoreofthegoodthathasbecomerelativelycheaper andlessofthegoodthatisnowrelativelymoreexpensive Chapter4 Slide28 IncomeandSubstitutionEffects Afallinthepriceofagoodhastwoeffects Substitution IncomeIncomeEffectConsumersexperienceanincreaseinrealpurchasingpowerwhenthepriceofonegoodfalls Chapter4 Slide29 IncomeandSubstitutionEffects SubstitutionEffectThesubstitutioneffectisthechangeinanitem sconsumptionassociatedwithachangeinthepriceoftheitem withthelevelofutilityheldconstant Whenthepriceofanitemdeclines thesubstitutioneffectalwaysleadstoanincreaseinthequantityoftheitemdemanded Chapter4 Slide30 IncomeandSubstitutionEffects IncomeEffectTheincomeeffectisthechangeinanitem sconsumptionbroughtaboutbytheincreaseinpurchasingpower withthepriceoftheitemheldconstant Whenaperson sincomeincreases thequantitydemandedfortheproductmayincreaseordecrease Chapter4 Slide31 IncomeandSubstitutionEffects IncomeEffectEvenwithinferiorgoods theincomeeffectisrarelylargeenoughtooutweighthesubstitutioneffect Chapter4 Slide32 IncomeandSubstitutionEffects NormalGood Food unitspermonth O Clothing unitspermonth Chapter4 Slide33 Food unitspermonth O R Clothing unitspermonth F1 S F2 T A U1 E SubstitutionEffect D IncomeandSubstitutionEffects InferiorGood Chapter4 Slide34 IncomeandSubstitutionEffects ASpecialCase TheGiffenGoodTheincomeeffectmaytheoreticallybelargeenoughtocausethedemandcurveforagoodtoslopeupward Thisrarelyoccursandisoflittlepracticalinterest Chapter4 Slide35 EffectofaGasolineTaxWithaRebate AssumePed 0 5Income 9 000Priceofgasoline 1 Chapter4 Slide36 EffectofaGasolineTaxWithaRebate GasolineConsumption gallons year ExpendituresOnOtherGoods Chapter4 Slide37 MarketDemand MarketDemandCurvesAcurvethatrelatesthequantityofagoodthatallconsumersinamarketbuytothepriceofthatgood FromIndividualtoMarketDemand Chapter4 Slide38 DeterminingtheMarketDemandCurve 161016322481325326101840471150246 PriceIndividualAIndividualBIndividualCMarket units units units units Chapter4 Slide39 SummingtoObtainaMarketDemandCurve Quantity 1 2 3 4 Price 0 5 5 10 15 20 25 30 Chapter4 Slide40 MarketDemand TwoImportantPoints1 Themarketdemandwillshifttotherightasmoreconsumersenterthemarket 2 Factorsthatinfluencethedemandsofmanyconsumerswillalsoaffectthemarketdemand Chapter4 Slide41 MarketDemand ElasticityofDemandRecall Priceelasticityofdemandmeasuresthepercentagechangeinthequantitydemandedresultingfroma1 percentchangeinprice Chapter4 Slide42 PriceElasticityandConsumerExpenditure DemandIfPriceIncreases IfPriceDecreases Expenditures Expenditures Inelastic Ep1 DecreaseIncrease Chapter4 Slide43 MarketDemand PointElasticityofDemandForlargepricechanges e g 20 thevalueofelasticitywilldependuponwherethepriceandquantitylieonthedemandcurve Chapter4 Slide44 MarketDemand PointElasticityofDemandPointelasticitymeasureselasticityatapointonthedemandcurve Itsformulais Chapter4 Slide45 MarketDemand ProblemsUsingPointElasticityWemayneedtocalculatepriceelasticityoverportionofthedemandcurveratherthanatasinglepoint Thepriceandquantityusedasthebasewillalterthepriceelasticityofdemand Chapter4 Slide46 MarketDemand AssumePriceincreasesfrom8 to 10quantitydemandedfallsfrom6to4Percentchangeinpriceequals 2 8 25 or 2 10 20 Percentchangeinquantityequals 2 6 33 33 or 2 4 50 PointElasticityofDemand AnExample Chapter4 Slide47 MarketDemand Elasticityequals 33 33 25 1 33or 50 20 2 54Whichoneiscorrect PointElasticityofDemand AnExample Chapter4 Slide48 MarketDemand ArcElasticityofDemandArcelasticitycalculateselasticityoverarangeofpricesItsformulais Chapter4 Slide49 MarketDemand ArcElasticityofDemand AnExample Chapter4 Slide50 TheAggregateDemandForWheat ThedemandforU S wheatiscomprisedofdomesticdemandandexportdemand AnExample Chapter4 Slide51 TheAggregateDemandForWheat Thedomesticdemandforwheatisgivenbytheequation QDD 1700 107PTheexportdemandforwheatisgivenbytheequation QDE 1544 176P Chapter4 Slide52 TheAggregateDemandForWheat Domesticdemandisrelativelypriceinelastic 0 2 whileexportdemandismorepriceelastic 0 4 Chapter4 Slide53 TheAggregateDemandForWheat Wheat millionbushels yr Price bushel 0 2 4 6 8 10 12 14 16 18 20 1000 2000 3000 4000 Chapter4 Slide54 ConsumerSurplus ConsumerSurplusThedifferencebetweenthemaximumamountaconsumeriswillingtopayforagoodandtheamountactuallypaid Chapter4 Slide55 ConsumerSurplus6 5 4 3 2 1 21 ConsumerSurplus RockConcertTickets Price perticket 2 3 4 5 6 13 0 1 14 15 16 17 18 19 20 Chapter4 Slide56 ConsumerSurplus Thestepladderdemandcurvecanbeconvertedintoastraight linedemandcurvebymakingtheunitsofthegoodsmaller Chapter4 Slide57 ConsumerSurplusfortheMarketDemand ConsumerSurplus RockConcertTickets Price perticket 2 3 4 5 6 13 0 1 14 15 16 17 18 19 20 Chapter4 Slide58 ConsumerSurplus Combiningconsumersurpluswiththeaggregateprofitsthatproducersobtainwecanevaluate 1 Costsandbenefitsofdifferentmarketstructures2 Publicpoliciesthatalterthebehaviorofconsumersandfirms Chapter4 Slide59 TheValueofCleanAir Airisfreeinthesensethatwedon tpaytobreatheit TheCleanAirActwasamendedin1970 Question Werethebenefitsofcleaninguptheairworththecosts AnExample Chapter4 Slide60 TheValueofCleanAir Peoplepaymoretobuyhouseswheretheairisclean DataforhousepricesamongneighborhoodsofBostonandLosAngeleswerecomparedwiththevariousairpollutants Chapter4 Slide61 ValuingCleanerAir Chapter4 Slide62 NetworkExternalities Uptothispointwehaveassumedthatpeople sdemandsforagoodareindependentofoneanother Iffact aperson sdemandmaybeaffectedbythenumberofotherpeoplewhohavepurchasedthegood Chapter4 Slide63 NetworkExternalities Ifthisisthecase anetworkexternalityexists Networkexternalitiescanbepositiveornegative Chapter4 Slide64 NetworkExternalities Apositivenetworkexternalityexistsifthequantityofagooddemandedbyaconsumerincreasesinresponsetoanincreaseinpurchasesbyotherconsumers Negativenetworkexternalitiesarejusttheopposite Chapter4 Slide65 NetworkExternalities TheBandwagonEffectThisisthedesiretobeinstyle tohaveagoodbecausealmosteveryoneelsehasit ortoindulgeinafad Thisisthemajorobjectiveofmarketingandadvertisingcampaigns e g toys clothing Chapter4 Slide66 PositiveNetworkExternality BandwagonEffect Quantity thousandspermonth Price perunit Chapter4 Slide67 Demand PositiveNetworkExternality BandwagonEffect Quantity thousandspermonth Price perunit D20 20 40 60 80 100 D40 D60 D80 D100 Themarketdemandcurveisfoundbyjoiningthepointsontheindividualdemandcurves Itisrelativelymoreelastic Chapter4 Slide68 Demand PositiveNetworkExternality BandwagonEffect Quantity thousandspermonth Price perunit D20 20 40 60 80 100 D40 D60 D80 D100 PurePriceEffect 48 Supposethepricefallsfrom 30to 20 Iftherewerenobandwagoneffect quantitydemandedwouldonlyincreaseto48 000 20 30 Chapter4 Slide69 Demand PositiveNetworkExternality BandwagonEffect Quantity thousandspermonth Price perunit D20 20 40 60 80 100 D40 D60 D80 D100 PurePriceEffect 20 48 BandwagonEffect Butasmorepeoplebuythegood itbecomesstylishtoownitandthequantitydemandedincreasesfurther 30 Chapter4 Slide70 NetworkExternalities TheSnobEffectIfthenetworkexternalityisnegative asnobeffectexists Thesnobeffectreferstothedesiretoownexclusiveoruniquegoods Thequantitydemandedofa snob goodishigherthefewerthepeoplewhoownit Chapter4 Slide71 NegativeNetworkExternality SnobEffect Quantity thousandspermonth Price perunit Chapter4 Slide72 NegativeNetworkExternality SnobEffect Quantity thousandspermonth 2 4 6 8 Thedemandislesselasticandasasnobgooditsvalueisgreatlyreducedifmorepeopleownit Salesdecreaseasaresult Examples Rolexwatchesandlonglinesattheskilift Price perunit D2 30 000 15 000 14 D4 D6 D8 Demand PurePriceEffect SnobEffect NetEffect Chapter4 Slide73 NetworkExternalitiesandtheDemandsforComputersandFaxMachines ExamplesofPositiveFeedbackExternalitiesMainframecomputers 1954 1965MicrosoftWindowsPCoperatingsystemFax machinesande mail Chapter4 Slide74 EmpiricalEstimationofDemand Themostdirectwaytoobtaininformationaboutdemandisthroughinterviewswhereconsumersareaskedhowmuchofaproducttheywouldbewillingtobuyatagivenprice Chapter4 Slide75 EmpiricalEstimationofDemand ProblemConsumersmaylackinformationorinterest orbemisleadbytheinterviewer Chapter4 Slide76 Indirectmarketingexperiments actualsalesoffersareposedtopotentialcustomersandtheresponsesofcustomersareobserved EmpiricalEstimationofDemand Chapter4 Slide77 TheStatisticalApproachtoDemandEstimationProperlyapplied thestatisticalapproachtodemandestimationcanenableonetosortouttheeffectsofvariablesonthequantitydemandedofaproduct Least squares regressionisoneapproach EmpiricalEstimationofDemand Chapter4 Slide78 YearQuantity Q Price P Income I DemandDataforRaspberries 1988424101989720101990817101991131717199216101719931515171994191220199520920199622520 Chapter4 Slide79 Assumingonlypricedeterminesdemand Q a bPQ 28 2 1 00P EmpiricalEstimationofDemand Chapter4 Slide80 EstimatingDemand Quantity Price 0 5 10 15 20 25 15 10 5 25 20 Chapter4 Slide81 EstimatingDemand Adjustingforchangesinincome Chapter4 Slide82 Forthedemandequation Q a bPElasticity EmpiricalEstimationofDemand EstimatingElasticities Chapter4 Slide83 Assuming Price incomeelasticityareconstantTheisoelasticdemand Theslope b priceelasticityofdemandConstant c incomeelasticity EmpiricalEstimationofDemand EstimatingElasticities Chapter4 Slide84 UsingtheRaspberrydata Priceelasticity 0 24 Inelastic Incomeelasticity 1 46 EmpiricalEstimationofDemand EstimatingElasticities Chapter4 Slide85 Subst