Chapter Fifteen Market demand 市场需求
Chapter Fifteen Market Demand 市场需求
Structure e From Individual to market demand Functions ◆ Elasticities Revenue and own-price elasticity of demand Marginal revenue and price elasticity
Structure ◆From Individual to Market Demand Functions ◆Elasticities ◆Revenue and own-price elasticity of demand ◆Marginal revenue and price elasticity
From individual to market demand Functions Think of an economy containing n consumers,denoted by i=1, Consumer is ordinary demand function for commodity j is 了(P1p2,m)
From Individual to Market Demand Functions ◆Think of an economy containing n consumers, denoted by i = 1, … ,n. ◆Consumer i’s ordinary demand function for commodity j is xj p p m *i i ( , , ) 1 2
From individual to market demand Functions e When all consumers are price-takers, the market demand function for commodity j is X」(P1,P2m,…,m2)=∑x(Pp1P2,mh) cIf all consumers are identical then Xj(p1, p2, M)=nxXj(p1, p2, m) where me nm
From Individual to Market Demand Functions ◆When all consumers are price-takers, the market demand function for commodity j is ◆If all consumers are identical then where M = nm. Xj p p m m n xj i p p m i i n ( , , , , ) ( , , ). * 1 2 1 1 2 1 = = Xj (p ,p ,M) n xj (p ,p ,m) * 1 2 = 1 2
From individual to market demand Functions e The market demand curve is the horizontal sum of the individual consumers'demand curves E.g. suppose there are only two consumers:iEA.B
From Individual to Market Demand Functions ◆The market demand curve is the “horizontal sum” of the individual consumers’ demand curves. ◆E.g. suppose there are only two consumers; i = A,B
From individual to market demand Functions p1 p1 vddd 20 5
From Individual to Market Demand Functions p1 p1 x A 1 * x B 1 20 15 * p1 ’ p1 ” p1 ’ p1
From individual to market demand Functions p1 p p1 p 20√A 15 p1 A,B x1+X1
From Individual to Market Demand Functions p1 p1 x A 1 * x B 1 * x x A B 1 1 * + p1 20 15 p1 ’ p1 ” p1 ’ p1 ” p1 ’
From individual to market demand Functions p1 p p1 p 20√A 5 p1 p A,B x1+X1
From Individual to Market Demand Functions p1 p1 x A 1 * x B 1 * x x A B 1 1 * + p1 20 15 p1 ’ p1 ” p1 ’ p1 ” p1 ’ p1
From individual to market demand Functions p1 p p1 p 20√A 5 p1 The“ horizonta|sum p of the demand curves of individuals a and B 35 A,B x1+X1
From Individual to Market Demand Functions p1 p1 x A 1 * x B 1 * x x A B 1 1 * + p1 20 15 35 p1 ’ p1 ” p1 ’ p1 ” p1 ’ p1 ” The “horizontal sum” of the demand curves of individuals A and B
Elasticities(弹性) ◆ Elasticity measures the“ sensitivity of one variable with respect to another o The elasticity of variable x with respect to variable y is △X X,y o△y
Elasticities （弹性） ◆Elasticity measures the “sensitivity” of one variable with respect to another. ◆The elasticity of variable X with respect to variable Y is x y x y , % % = .