微观经济之弹性理论 (microeconomics -Elasticity).ppt

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1、1Topic3-Week3Elasticity2ElasticityofDemand&SupplyTheprevioustopicfocusedonthewayinwhichmarketsoperateviatheinteractionofdemandandsupply.Weanalysedthefactorsthatinfluencedemandandsupply,andthewaymarketsreacttochangesinthesefactors.Ourfocuswasonthedirectionthesefactorswouldshiftourdemandand

2、supplycurves.Wenowwishtoextendouranalysisbylookingnotonlyatthedirectionoftheseshifts,buttheirmagnitudes.3ElasticityofDemand&SupplyWedeveloptheconceptofelasticitytomeasurethesensitivityofD+Stochangesinfactorssuchas:Ownprice,incomeandcrossprices.Priceelasticityofdemand–Weknowthatownprice,among

3、othervariables,hasaninfluenceonthedemandforagood,serviceorfactorinput.Inmostcasespriceistheinitiatingvariableandquantityistherespondentvariable.4ElasticityofDemand&SupplyWecalculateownpriceelasticitiestoanswerquestionssuchas:Byhowmuchwilldemandincreaseifpriceisreducedby2%?Willapriceincreasel

4、eadtoanincreaseintotalrevenue?Ownpriceelasticityiscomputedasfollows:5ElasticityofDemand&SupplyPriceelasticityofdemandcanbecalculatedintwoways:ataparticularpointonthedemandcurve(pointelasticity),oroverarangeonthedemandcurve(arcelasticity).6ElasticityofDemand&SupplyOwnpriceelasticityofdemandwi

5、llalwaysbenegativefornormallyslopeddemandcurves.(why?)Forthisreasoneconomiststypicallyignorethesignofownpriceelasticitiesandfocusontheabsolutemagnitudeofthecoefficient.Let’scomparethecalculationofarcandpointelasticities.Elasticitycalculationstypicallyrequire4piecesofinformation:7Elasticityof

6、Demand&SupplyP1=theinitialpriceP2=thesubsequentpriceQ1=theinitialquantitydemandedQ2=thesubsequentquantitydemandedArcmethod:Pointmethod:8ElasticityofDemand&SupplyThearcpriceelasticityofdemandisanapproximationofthecoefficientovertherangeunderconsideration.Thisisbecauseelasticityofdemandvariesa

7、longalineardemandcurve!Noticethatelasticityrangesfrom0to.9ElasticityofDemand&SupplyThelinkbetweendemandelasticityandtotalrevenue–10ElasticityofDemand&SupplyCaveat–Thefirm’scostsarenottakenintoconsiderationintheabove‘experiment’andsoweshouldbeaware