AP微观经济学2

3.ElasticityElasticityElasticityofdemandElasticityElasticityofsupplyPriceelasticityofdemandCross-elasticityofdemandIncomeelasticityofdemandPriceElasticityofDemandPriceelasticityisameasureoftheresponsivenessofthequantitydemandedtoachangeinprice.Theformulausedtocalculatethepriceelasticityofdemandis://percentchangeinquantitydemandpriceelasticityofdemandpercentchangeinpriceQQPP21122112PPPPQQQQ/)/2P(PPP)/2Q(QQQ21122112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%=-0.43PriceElasticityofDemandIfasmallpercentagepricechangeresultsinalargepercentagechangeinquantitydemanded,thedemandforthatgoodissaidtobehighlyelastic.Theabsolutevalueofpriceelasticityisgreaterthanone.Ifalargepercentagepricechangeresultsinasmallpercentagechangeinquantitydemanded,demandisrelativelyinelastic.Theabsolutevalueofpriceelasticityislessthanone.Aperfectlyelasticdemandcurveishorizontal,anditselasticityisinfinite.Ifthepriceincreases,quantitydemandedgoestozero.Aperfectlyinelasticdemandcurveisvertical,andelasticityiszero.Ifthepricechanges,therewillbenochangeinthequantitydemand.PriceElasticityofDemandQuantityPriceQuantityPriceElasticInelasticPerfectlyelastic&PerfectlyinelasticPQElasticity=0PQElasticity=infinityElasticityandtotalrevenuePriceQdemandedPriceelasticityofdemandTotalrevenue=P*Q+-1-+-1++-=1=-+1+-+1--+=1=ElasticitychangesalongalinearcurveTherelationbetweenpriceelasticityofdemandandtotalrevenue.Totalrevenueismaximizedatthepriceandquantitywheredemandisunitelastic(priceelasticity=－1)andsodecreaseswithbothpriceincreasesorpricedecreasesfromthatlevel.Whenpriceisintheelastic(inelastic)regionofthedemandcurve,apriceincreasewilldecrease(increase)totalrevenue.ElasticitychangesalongalinearcurvePQE1,elasticE1,inelasticE=1,unitelasticPriceelasticityofdemandPriceelasticity1:elasticPriceelasticity=1:unitelasticPriceelasticity1:inelasticPriceelasticityisinfinite:perfectlyelasticPriceelasticityiszero:perfectlyinelasticFactorsthatInfluencetheElasticityofDemandAvailabilityofsubstitutes.Ifgoodsubstitutesareavailable,apriceincreaseinoneproductwillinduceconsumerstoswitchtoasubstitutegood.Relativeamountofincomespentonthegood.Whentheportionofconsumerbudgetsspentonaparticulargoodisrelativelysmall,demandforthatgoodwilltendtoberelativelyinelastic.(Theratioofthecostofaparticularproducttothetotalbudgetoftheconsumer.)Timesincethepricechange.Thepriceelasticityofdemandformostproductsisgreaterinthelongrunthanintheshortrun.Competitivestructureofthemarketandconsumerchoices.Theconsumerwillhavemorechoicesofproductsandsubstitutesthemorecompetitivetheproductmarket.CrossElasticityofDemandCrosselasticityofdemandmeasuresthechangeinthedemandforagoodinresponsetothechangeinpriceofasubstituteorcomplementarygood.Theformulaforcalculatingcrosselasticityofdemandis:Crosselasticityofdemandispositiveforsubstitutegoods.(Example:appleandpear)Crosselasticityofdemandisnegativeforcomplementgoods.(Example:carandgas)//percentchangeinquantitydemandedcrosselasticityofdemandpercentchangeinpriceofsubstituteorcomplementAABBQQPPIncomeElasticityofDemandIncomeelasticityofdemandmeasuresthesensitivityofthequantityofagoodorservicedemandedtoachangeinaconsumer’sincome.Theformulaforincomeelasticityofdemandis:TheapplicationofIncomeelasticityNormalGoods:positiveincomeelasticity,demandriseswithincome.(0)Luxuries:highpositiveelasticity,demandrisesstronglywithincome.(1)Necessitygoods:normalbutlowelasticity(between0～1)InferiorGoods:negativeincomeelasticity,demandfallswithincome(0)//percentchangeinquantitydemandedincomeelasticityofdemandpercentchangeinincomeQQIIPriceElasticityofsupplyPriceelasticityofsupplyΔPrice%suppliedsΔQuantitie%DeterminantsofpriceelasticityofsupplyFactorsthatinfluencetheelasticityofsupplyAvailableresourcesubstituteSupplydecisiontimeframeElasticityofSupplyandDemandandTaxIncidenceIfthesupplycurveislesselastic,sellerswillbearahighertaxburden.(Figurea)Ifthedemandcurveislesselastic,buyerswillbearahighertaxburden.(Figureb)(a)InelasticSupplyCurvetaxrevenuefrombuyerstaxrevenuefromsellersDPricePTaxPEPSDWLSDtaxQTaxQEQuantitySPPriceQuantityEPTaxPTaxQEQtaxrevenuefrombuyerstaxrevenuefromsellersDSDWL(b)InelasticDemandCurveDtax4.TheoryofconsumerchoiceBasictenetsofthetheoryofconsumerchoice1.Theconsumerisrational.2.Theconsumercanrankgoodsinorderofpreference.3.Theconsumerunderstandsdiminishingmarginalutility(seenextslide).4.Theconsumerfacesconstraintsofincomes(seenextslide).5.Theconsumerwantstomakechoicethatwillmaximizehertotalutilityrelativetotheconstraintsofincome.(seenextslide)LawofdiminishingmarginalutilityUtilityaconsumercanobtainHotdogsconsumedSatisfactionfromeatingonemorehotdog