平狄克 微观经济学 第七版 课件 第二章

– the direction of change in quantity with price – how much the quantity changes with a change in price
• in amount, or in proportion
Price Elasticity of Demand
19 20
%∆QS ∆QS / QS = % ∆P ∆P / P
Gasoline: SR and LR Demand Curves
Price
Short-Run and Long-Run Supply Elasticity
• For most goods and services,
– long-run price elasticity of supply is greater than short-run price elasticity of supply – firms can better adjust their capacity (“fixed” inputs) and method of production if given sufficient time
• Income elasticity also varies with the amount of time consumers have to respond to an income change
– for most goods and services, income elasticity is larger in the long run – when income changes, it takes time to adjust spending patterns
Infinitely Elastic Demand
Price
Perfectly Inelastic Demand
Price
D
EP = ∞
P0
EP = 0
D
Quantity
15
Q0
Quantity
16
Other Demand Elasticities
• Income Elasticity of Demand
• Measures the sensitivity of quantity demanded to a price change
– the percentage change in the quantity demanded of a good that results from a one percent change in price
7 8
The Long-term Trend of Copper Price
Price
The Long-term Trend of Copper Price
• Decreases in the costs of production (discovery of new deposits and improved mining technology) have increased the supply of copper by more than enough to offset the increase in demand • Short-run and long-run equilibrium
P D D’ S S’
Income increases, and raw material prices fall – quantity increases – if the increase in D is greater than the increase in S, price will also increases
• When price of software increases, quantity demanded of computer decreases
EI =
∆ Q/Q ∆ I/I
• Cross-Price Elasticity of Demand
– the percentage change in the quantity demanded of one good that results from a one percent change in the price of another good
• Definition: elasticity is the percentage change in one variable resulting from a one percent change in another variable • Elasticity measures how sensitive a variable is with a change in another variable, in proportion terms
• Equilibrium prices are determined by the relative level of supply and demand • Changes in supply and demand will cause changes in the equilibrium price and quantity in a free market
The Market Mechanism
Price ($ per unit) Surplus
The Market Mechanism
Price ($ per unit)
S
S
P1 P0 P0 P1
Shortage
D
D
Quantity
2
Q0
Quantity
1
Q0
Changes in Market Equilibrium
S EP =
Short-Run and Long-Run Demand Elasticities
• Price Elasticity of Demand
– in general, demand is much more price elastic in the long run
• It takes time for consumers to adjust consumption habits • Demand might be linked to another good that changes slowly • Usually more substitutes are available in the long run
– many substitutes, demand is price elastic – enough time to find substitutes => more price elastic
• Price elasticity varies along a demand curve
13 14
S1900
S1950
S2002
Long-Run Path of Price and Consumption
D1900
D1950
D2002
9 10
Quantity
Demand and Supply Elasticities
• In describing a demand or supply curve, we are interested in:
11
EP =
% ∆Q ∆Q / Q = %∆P ∆P / P
12
2
Price Elasticity of Demand
• Always a negative number
– as price increases, quantity decreases (and vice versa)
Price Elasticity of Demand
P
Shift in Demand
(income increases)
D D’ S
Income increases – D increases to D’ – shortage at P0 – new equilibrium at P1 and Q1
P1 P0
3
Q0 Q1 Q1’
Q
4
Shift in Supply
(raw material prices fall)
P D S S’
Raw material prices fall – S shifts to S’ – surplus at P0 – new equilibrium at P1 and Q1
Outward Shift in Both D and S
– the percentage change in quantity demanded with a one percent change in income
Cross-Price Elasticity
• Complements: Computer and Software
– cross-price elasticity of demand is negative
DSR
P0
• People cannot easily adjust consumption of gasoline in the short run • In the long run, they tend to drive smaller and more fuel efficient cars
∆ Q1 Q1 = ∆P2 P2
17
18
3
Price Elasticity of Supply
• Measures the sensitivity of quantity supplied given a change in price