AP微观经济学2.ppt

3 Elasticity Elasticity PriceElasticityofDemand Priceelasticityisameasureoftheresponsivenessofthequantitydemandedtoachangeinprice Theformulausedtocalculatethepriceelasticityofdemandis Priceelasticityofdemand IfthepriceofproductAisincreasedfrom 1perunitto 1 10perunit thedemandwilldecreasefrom5millionunitsto4 8millionunits CalculatethepriceelasticityofdemandforproductA Priceelasticityofdemand Thepercentagechangeinquantity 4 8 5 0 5 0 4 8 2 0 2 4 9 0 041 4 1 Thepercentagechangeinprice 1 10 1 00 1 10 1 00 2 0 10 1 05 0 095 9 5 So thepriceelasticityofdemandforproductAis 4 1 9 5 0 43 PriceElasticityofDemand Ifasmallpercentagepricechangeresultsinalargepercentagechangeinquantitydemanded thedemandforthatgoodissaidtobehighlyelastic Theabsolutevalueofpriceelasticityisgreaterthanone Ifalargepercentagepricechangeresultsinasmallpercentagechangeinquantitydemanded demandisrelativelyinelastic Theabsolutevalueofpriceelasticityislessthanone Aperfectlyelasticdemandcurveishorizontal anditselasticityisinfinite Ifthepriceincreases quantitydemandedgoestozero Aperfectlyinelasticdemandcurveisvertical andelasticityiszero Ifthepricechanges therewillbenochangeinthequantitydemand PriceElasticityofDemand Elastic Inelastic Perfectlyelastic Perfectlyinelastic Elasticityandtotalrevenue Elasticitychangesalongalinearcurve Therelationbetweenpriceelasticityofdemandandtotalrevenue Totalrevenueismaximizedatthepriceandquantitywheredemandisunitelastic priceelasticity 1 andsodecreaseswithbothpriceincreasesorpricedecreasesfromthatlevel Whenpriceisintheelastic inelastic regionofthedemandcurve apriceincreasewilldecrease increase totalrevenue Elasticitychangesalongalinearcurve P Q E 1 elastic E 1 inelastic E 1 unitelastic Priceelasticityofdemand Priceelasticity 1 elasticPriceelasticity 1 unitelasticPriceelasticity 1 inelasticPriceelasticityisinfinite perfectlyelasticPriceelasticityiszero perfectlyinelastic FactorsthatInfluencetheElasticityofDemand Availabilityofsubstitutes Ifgoodsubstitutesareavailable apriceincreaseinoneproductwillinduceconsumerstoswitchtoasubstitutegood Relativeamountofincomespentonthegood Whentheportionofconsumerbudgetsspentonaparticulargoodisrelativelysmall demandforthatgoodwilltendtoberelativelyinelastic Theratioofthecostofaparticularproducttothetotalbudgetoftheconsumer Timesincethepricechange Thepriceelasticityofdemandformostproductsisgreaterinthelongrunthanintheshortrun Competitivestructureofthemarketandconsumerchoices Theconsumerwillhavemorechoicesofproductsandsubstitutesthemorecompetitivetheproductmarket CrossElasticityofDemand Crosselasticityofdemandmeasuresthechangeinthedemandforagoodinresponsetothechangeinpriceofasubstituteorcomplementarygood Theformulaforcalculatingcrosselasticityofdemandis Crosselasticityofdemandispositiveforsubstitutegoods Example appleandpear Crosselasticityofdemandisnegativeforcomplementgoods Example carandgas IncomeElasticityofDemand Incomeelasticityofdemandmeasuresthesensitivityofthequantityofagoodorservicedemandedtoachangeinaconsumer sincome Theformulaforincomeelasticityofdemandis TheapplicationofIncomeelasticityNormalGoods positiveincomeelasticity demandriseswithincome 0 Luxuries highpositiveelasticity demandrisesstronglywithincome 1 Necessitygoods normalbutlowelasticity between0 1 InferiorGoods negativeincomeelasticity demandfallswithincome 0 PriceElasticityofsupply Priceelasticityofsupply Determinantsofpriceelasticityofsupply FactorsthatinfluencetheelasticityofsupplyAvailableresourcesubstituteSupplydecisiontimeframe ElasticityofSupplyandDemandandTaxIncidence Ifthesupplycurveislesselastic sellerswillbearahighertaxburden Figurea Ifthedemandcurveislesselastic buyerswillbearahighertaxburden Figureb 4 Theoryofconsumerchoice Basictenetsofthetheoryofconsumerchoice Theconsumerisrational Theconsumercanrankgoodsinorderofpreference Theconsumerunderstandsdiminishingmarginalutility seenextslide Theconsumerfacesconstraintsofincomes seenextslide Theconsumerwantstomakechoicethatwillmaximizehertotalutilityrelativetotheconstraintsofincome seenextslide Lawofdiminishingmarginalutility Utilityaconsumercanobtain Hotdogsconsumed Satisfactionfromeatingonemorehotdogincreasesatadecreasingrate Themarginalutilityisdecreasing Thetotalutilitycontinuestoincreaseuntilthemarginalutilityofonemorehotdogbecomesnegative BudgetConstraints Budgetconstraintcanbeconstructedbasedontheconsumer sincomeandthepricesoftheavailablegoods ThebudgetlineshowsallcombinationsofGoodXandGoodYthatwilljustexhausttheconsumer sincome PX QX PY QY I Utility maximizingrule Given Consumerincome 52PriceofJ 8PriceofK 4 HowmanyJandKwilltheconsumerpurchasetomaximizeherutility Utility maximizingrule s t J 8 K 4 52 Therefore J 4 K 5Now 24 8 12 4 34 8 5 4 52 Consumer suppliersurplus Price Quantity D S Consumersurplus thedifferencebetweenwhattheconsumerhopetopayandheactuallypaid marketprice Suppliersurplus thedifferencebetweenwhattheselleractuallyreceived marketprice andhehopetoreceive Marketprice Substitutiona