微观经济学原理曼昆英文第五章.ppt

ElasticityanditsApplication Economics PRINCIPLESOF N GregoryMankiw 5 Inthischapter lookfortheanswerstothesequestions Whatiselasticity Whatkindsofissuescanelasticityhelpusunderstand Whatisthepriceelasticityofdemand Howisitrelatedtothedemandcurve Howisitrelatedtorevenue expenditure Whatisthepriceelasticityofsupply Howisitrelatedtothesupplycurve Whataretheincomeandcross priceelasticitiesofdemand 1 Youdesignwebsitesforlocalbusinesses Youcharge 200perwebsite andcurrentlysell12websitespermonth Yourcostsarerising includingtheopportunitycostofyourtime soyouconsiderraisingthepriceto 250 Thelawofdemandsaysthatyouwon tsellasmanywebsitesifyouraiseyourprice Howmanyfewerwebsites Howmuchwillyourrevenuefall ormightitincrease Ascenario 0 2 ELASTICITYANDITSAPPLICATION 3 Elasticity Basicidea Elasticitymeasureshowmuchonevariablerespondstochangesinanothervariable Onetypeofelasticitymeasureshowmuchdemandforyourwebsiteswillfallifyouraiseyourprice Definition ElasticityisanumericalmeasureoftheresponsivenessofQdorQstooneofitsdeterminants 0 ELASTICITYANDITSAPPLICATION 4 PriceElasticityofDemand PriceelasticityofdemandmeasureshowmuchQdrespondstoachangeinP Looselyspeaking itmeasurestheprice sensitivityofbuyers demand 0 ELASTICITYANDITSAPPLICATION 5 PriceElasticityofDemand Priceelasticityofdemandequals 0 Prisesby10 Qfallsby15 Example ELASTICITYANDITSAPPLICATION 6 PriceElasticityofDemand AlongaDcurve PandQmoveinoppositedirections whichwouldmakepriceelasticitynegative Wewilldroptheminussignandreportallpriceelasticitiesaspositivenumbers 0 ELASTICITYANDITSAPPLICATION 7 CalculatingPercentageChanges 0 Demandforyourwebsites Standardmethodofcomputingthepercentage change GoingfromAtoB the changeinPequals 250 200 200 25 ELASTICITYANDITSAPPLICATION 8 CalculatingPercentageChanges 0 Demandforyourwebsites Problem Thestandardmethodgivesdifferentanswersdependingonwhereyoustart FromAtoB Prises25 Qfalls33 elasticity 33 25 1 33FromBtoA Pfalls20 Qrises50 elasticity 50 20 2 50 ELASTICITYANDITSAPPLICATION 9 CalculatingPercentageChanges So weinsteadusethemidpointmethod 0 Themidpointisthenumberhalfwaybetweenthestart endvalues theaverageofthosevalues Itdoesn tmatterwhichvalueyouuseasthe start andwhichasthe end yougetthesameanswereitherway ELASTICITYANDITSAPPLICATION 10 CalculatingPercentageChanges Usingthemidpointmethod the changeinPequals 0 The changeinQequals Thepriceelasticityofdemandequals ACTIVELEARNING1Calculateanelasticity 11 Usethefollowinginformationtocalculatethepriceelasticityofdemandforhotelrooms ifP 70 Qd 5000ifP 90 Qd 3000 ELASTICITYANDITSAPPLICATION 12 Whatdeterminespriceelasticity Tolearnthedeterminantsofpriceelasticity welookataseriesofexamples Eachcomparestwocommongoods Ineachexample Supposethepricesofbothgoodsriseby20 ThegoodforwhichQdfallsthemost inpercent hasthehighestpriceelasticityofdemand Whichgoodisit Why Whatlessondoestheexampleteachusaboutthedeterminantsofthepriceelasticityofdemand 0 ELASTICITYANDITSAPPLICATION 13 EXAMPLE1 Breakfastcerealvs Sunscreen Thepricesofbothofthesegoodsriseby20 ForwhichgooddoesQddropthemost Why Breakfastcerealhasclosesubstitutes e g pancakes waffles pizza sobuyerscaneasilyswitchifthepricerises Sunscreenhasnoclosesubstitutes soconsumerswouldprobablynotbuymuchlessifitspricerises Lesson Priceelasticityishigherwhenclosesubstitutesareavailable 0 ELASTICITYANDITSAPPLICATION 14 EXAMPLE2 BlueJeans vs Clothing Thepricesofbothgoodsriseby20 ForwhichgooddoesQddropthemost Why Foranarrowlydefinedgoodsuchasbluejeans therearemanysubstitutes khakis shorts Therearefewersubstitutesavailableforbroadlydefinedgoods Therearen ttoomanysubstitutesforclothing otherthanlivinginanudistcolony Lesson Priceelasticityishigherfornarrowlydefinedgoodsthanbroadlydefinedones 0 ELASTICITYANDITSAPPLICATION 15 EXAMPLE3 Insulinvs CaribbeanCruises Thepricesofbothofthesegoodsriseby20 ForwhichgooddoesQddropthemost Why Tomillionsofdiabetics insulinisanecessity Ariseinitspricewouldcauselittleornodecreaseindemand Acruiseisaluxury Ifthepricerises somepeoplewillforegoit Lesson Priceelasticityishigherforluxuriesthanfornecessities 0 ELASTICITYANDITSAPPLICATION 16 EXAMPLE4 GasolineintheShortRunvs GasolineintheLongRun Thepriceofgasolinerises20 DoesQddropmoreintheshortrunorthelongrun Why There snotmuchpeoplecandointheshortrun otherthanridethebusorcarpool Inthelongrun peoplecanbuysmallercarsorliveclosertowheretheywork Lesson Priceelasticityishigherinthelongrunthantheshortrun 0 ELASTICITYANDITSAPPLICATION 17 TheDeterminantsofPriceElasticity ASummary Thepriceelasticityofdemanddependson theextenttowhichclosesubstitutesareavailablewhetherthegoodisanecessityoraluxuryhowbroadlyornarrowlythegoodisdefinedthetimehorizon elasticityishigherinthelongrunthantheshortrun 0 ELASTICITYANDITSAPPLICATION 18 TheVarietyofDemandCurves Thepriceelasticityofdemandiscloselyrelatedtotheslopeofthedemandcurve Ruleofthumb Theflatterthecurve thebiggertheelasticity Thesteeperthecurve thesmallertheelasticity FivedifferentclassificationsofDcurves 0 ELASTICITYANDITSAPPLICATION 19 Perfectlyinelasticdemand oneextremecase Pfallsby10 Qchangesby0 0 0 10 0 Consumers pricesensitivity Dcurve Elasticity vertical none 0 ELASTICITYANDITSAPPLICATION 20 Inelasticdemand Qriseslessthan10 0 10 10 1 Pfallsby10 Consumers pricesensitivity Dcurve Elasticity relativelysteep relativelylow 1 ELASTICITYANDITSAPPLICATION 21 Unitelasticdemand Qrisesby10 0 10 10 1 Pfallsby10 Consumers pricesensitivity Elasticity intermediate 1 Dcurve intermediateslope ELASTICITYANDITSAPPLICATION 22 Elasticdemand Qrisesmorethan10 0 10 10 1 Pfallsby10 Consumers pricesensitivity Dcurve Elasticity relativelyflat relativelyhigh 1 ELASTICITYANDITSAPPLICATION 23 Perfectlyelasticdemand theotherextreme P1 Pchangesby0 Qchangesbyany 0 any 0 infinity P2 Consumers pricesensitivity Dcurve Elasticity infinity horizontal extreme ELASTICITYANDITSAPPLICATION 24 ElasticityofaLinearDemandCurve 0 Theslopeofalineardemandcurveisconstant butitselasticityisnot ELASTICITYANDITSAPPLICATION 25 PriceElasticityandTotalRevenue Continuingourscenario ifyouraiseyourpricefrom 200to 250 wouldyourrevenueriseorfall Revenue PxQApriceincreasehastwoeffectsonrevenue HigherPmeansmorerevenueoneachunityousell Butyousellfewerunits lowerQ duetoLawofDemand Whichofthesetwoeffectsisbigger Itdependsonthepriceelasticityofdemand 0 ELASTICITYANDITSAPPLICATION 26 PriceElasticityandTotalRevenue Ifdemandiselastic thenpriceelast ofdemand 1 changeinQ changeinPThefallinrevenuefromlowerQisgreaterthantheincreaseinrevenuefromhigherP sorevenuefalls Revenue PxQ 0 ELASTICITYANDITSAPPLICATION 27 PriceElasticityandTotalRevenue Elasticdemand elasticity 1 8 WhenDiselastic apriceincreasecausesrevenuetofall 0 lostrevenueduetolowerQ increasedrevenueduetohigherP Demandforyourwebsites ELASTICITYANDITSAPPLICATION 28 PriceElasticityandTotalRevenue Ifdemandisinelastic thenpriceelast ofdemand 1 changeinQ changeinPThefallinrevenuefromlowerQissmallerthantheincreaseinrevenuefromhigherP sorevenuerises Inourexample supposethatQonlyfallsto10 insteadof8 whenyouraiseyourpriceto 250 Revenue PxQ 0 ELASTICITYANDITSAPPLICATION 29 PriceElasticityandTotalRevenue Now demandisinelastic elasticity 0 82 WhenDisinelastic apriceincreasecausesrevenuetorise 0 lostrevenueduetolowerQ increasedrevenueduetohigherP Demandforyourwebsites A Pharmaciesraisethepriceofinsulinby10 Doestotalexpenditureoninsulinriseorfall B Asaresultofafarewar thepriceofaluxurycruisefalls20 Doesluxurycruisecompanies totalrevenueriseorfall ACTIVELEARNING2Elasticityandexpenditure revenue 30 ELASTICITYANDITSAPPLICATION 31 APPLICATION DoesDrugInterdictionIncreaseorDecreaseDrug RelatedCrime Onesideeffectofillegaldruguseiscrime Usersoftenturntocrimetofinancetheirhabit Weexaminetwopoliciesdesignedtoreduceillegaldruguseandseewhateffectstheyhaveondrug relatedcrime Forsimplicity weassumethetotaldollarvalueofdrug relatedcrimeequalstotalexpenditureondrugs Demandforillegaldrugsisinelastic duetoaddictionissues 0 ELASTICITYANDITSAPPLICATION 32 Policy1 Interdiction 0 Interdictionreducesthesupplyofdrugs Sincedemandfordrugsisinelastic Prisespropor tionallymorethanQfalls Result anincreaseintotalspendingondrugs andindrug relatedcrime ELASTICITYANDITSAPPLICATION 33 Policy2 Education 0 Educationreducesthedemandfordrugs PandQfall Result Adecreaseintotalspendingondrugs andindrug relatedcrime ELASTICITYANDITSAPPLICATION 34 PriceElasticityofSupply PriceelasticityofsupplymeasureshowmuchQsrespondstoachangeinP Looselyspeaking itmeasuressellers price sensitivity Again usethemidpointmethodtocomputethepercentagechanges 0 ELASTICITYANDITSAPPLICATION 35 PriceElasticityofSupply Priceelasticityofsupplyequals 0 Prisesby8 Qrisesby16 Example ELASTICITYANDITSAPPLICATION 36 TheVarietyofSupplyCurves Theslopeofthesupplycurveiscloselyrelatedtopriceelasticityofsupply Ruleofthumb Theflatterthecurve thebiggertheelasticity Thesteeperthecurve thesmallertheelasticity Fivedifferentclassifications 0 ELASTICITYANDITSAPPLICATION 37 Perfectlyinelastic oneextreme Q1 P1 Qchangesby0 0 0 10 0 Prisesby10 Sellers pricesensitivity Scurve Elasticity vertical none 0 ELASTICITYANDITSAPPLICATION 38 Inelastic Q1 P1 Qriseslessthan10 0 10 10 1 Prisesby10 Sellers pricesensitivity Scurve Elasticity relativelysteep relativelylow 1 ELASTICITYANDITSAPPLICATION 39 Unitelastic Q1 P1 Qrisesby10 0 10 10 1 Prisesby10 Sellers pricesensitivity Scurve Elasticity intermediateslope intermediate 1 ELASTICITYANDITSAPPLICATION 40 Elastic Q1 P1 Qrisesmorethan10 0 10 10 1 Prisesby10 Sellers pricesensitivity Scurve Elasticity relativelyflat relativelyhigh 1 ELASTICITYANDITSAPPLICATION 41 Perfectlyelastic theotherextreme P1 Pchangesby0 Qchangesbyany 0 any 0 infinity P2 Sellers pricesensitivity Scurve Elasticity horizontal extreme infinity ELASTICITYANDITSAPPLICATION 42 TheDeterminantsofSupplyElasticity Themoreeasilysellerscanchangethequantitytheyproduce thegreaterthepriceelasticityofsupply Example Supplyofbeachfrontpropertyishardertovaryandthuslesselasticthansupplyofnewcars Formanygoods priceelasticityofsupplyisgreaterinthelongrunthanintheshortrun becausefirmscanbuildnewfactories ornewfirmsmaybeabletoenterthemarket ACTIVELEARNING3Elasticityandchangesinequilibrium 43 Thesupplyofbeachfrontpropertyisinelastic Thesupplyofnewcarsiselastic Supposepopulationgrowthcausesdemandforbothgoodstodouble ateachprice Qddoubles ForwhichproductwillPchangethemost ForwhichproductwillQchangethemost ELASTICITYANDITSAPPLICATION 44 HowthePriceElasticityofSupplyCanVary 0 SupplyoftenbecomeslesselasticasQrises duetocapacitylimits elasticity 1 elasticity 1 ELASTICITYANDITSAPPLICATION 45 OtherElasticities Incomeelasticityofdemand measurestheresponseofQdtoachangeinconsumerincome RecallfromChapter4 Anincreaseinincomecausesanincreaseindemandforanormalgood Hence fornormalgoods incomeelasticity 0 Forinferiorgoods incomeelasticity 0 ELASTICITYANDITSAPPLICATION 46 OtherElasticities Cross priceelasticityofdemand measurestheresponseofdemandforonegoodtochangesinthepriceofanothergood Forsubstitutes cross priceelasticity 0 e g anincreaseinpriceofbeefcausesanincreaseindemandforchicken Forcomplements cross priceelasticity 0 e g anincreaseinpriceofcomputerscausesdecreaseindemandforsoftware ELASTICITYANDITSAPPLICATION 47 Cross PriceElasticitiesintheNews AsGasCostsSoa