微观经济学原理曼昆英文第七章.ppt

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Evaluating the Market Equilibrium Market eq’m: P = $30  Q = 15,000 Total surplus = CS + PS Is the market eq’m efficient? P Q S D CS PS CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Which Buyers Consume the Good? P Q S D Every buyer whose WTP is ≥ $30 will buy. Every buyer whose WTP is  $30 will not. So, the buyers who value the good most highly are the ones who consume it. CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Which Sellers Produce the Good? P Q S D Every seller whose cost is ≤ $30 will produce the good. Every seller whose cost is $30 will not. So, the sellers with the lowest cost produce the good. CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Does Eq’m Q Maximize Total Surplus? P Q S D At Q = 20, cost of producing the marginal unit is $35 value to consumers of the marginal unit is only $20 Hence, can increase total surplus by reducing Q. This is true at any Q greater than 15. CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Does Eq’m Q Maximize Total Surplus? P Q S D At Q = 10, cost of producing the marginal unit is $25 value to consumers of the marginal unit is $40 Hence, can increase total surplus by increasing Q. This is true at any Q less than 15. CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Does Eq’m Q Maximize Total Surplus? P Q S D The market eq’m quantity maximizes total surplus:At any other quantity, can increase total surplus by moving toward the market eq’m quantity. CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS * Adam Smith and the Invisible Hand “Man has almost constant occasion for the help of his brethren, and it is vain for him to expect it from their benevolence only. Adam Smith, 1723-1790 Passages from The Wealth of Nations, 1776 He will be more likely to prevail