05弹性及其应用祥解.pptVIP

* Economists classify supply curves according to their elasticity. The next 5 slides present the different classifications, from least to most elastic. * * * * * * This section is not perfectly analogous to the section on the determinants of the price elasticity of demand, but it’s similar enough that you can probably cover it more quickly and with less hand-holding. * This is one of the “Problems and Applications” at the end of the chapter. * In this slide and the next, the initial price and quantity and the two demand curves are the same. The only difference is the elasticity of supply and slope of the supply curve. [The D curve shifts to the right, but not in a parallel fashion: at each price, quantity demanded is twice as high, so the new D curve will be flatter than the initial one.] In the text box containing the verbal explanation, “bigger impact” is shorthand for “bigger percentage impact” or “bigger proportional impact.” * * This graph replicates the one in Figure 6. Note: The graph here is not quite drawn to scale. When the price rises from $3 to $4 (a 29% increase, using the midpoint method), quantity rises from 100 to 120 (or 67%). Because 67% 29%, price elasticity of supply is greater than one. When the price rises from $12 to $15 (22%), quantity rises from 500 to 525 (about 5%), so price elasticity of supply is less than one. The way I like to explain this is as follows: When output is very low, it is relatively easy for firms to increase output. They may have excess capacity, or they are not requiring full effort from their workers. Increasing output is not difficult, so it doesn’t take much of an increase in price to induce an increase in production. When output is very high, it is relatively expensive for firms to increase output further: there’s little or no excess capacity, they are already running their factories and machines at a high level of intensity. To increase output further, they might have to pay the