微观经济学课件 Lecture 13 14 2.14.06student.ppt

Lectures 13 and 14 Applying the Competitive Model Key topics 1. consumer surplus 2. producer surplus 3. competition maximizes surplus 4. policies that shift supply curves 5. policies that create a wedge between supply and demand comparing both types of policies: imports Consumer’s well-being using a consumers utility function is not practical for 2 reasons: we dont know individuals utility functions we cannot compare utilities across individuals instead, we measure consumer welfare in dollars easier to measure than utility can compare dollars across individuals Measuring consumer well-being consumer surplus (CS) from a good = benefit a consumer gets from consuming it (in $s) minus its price how much more youd be willing to pay than you did pay for a good demand curve contains this information demand curve reflects a consumers marginal willingness to pay: amount a consumer will pay for an extra unit Graph individuals CS area under individuals demand curve and above market price up to quantity that consumer buys Bruce Springsteen’s Gift to His Fans 2002 average rock concert ticket price was $51 $75 that Bruce Springsteen and the E Street Band charged for their concerts was below the market clearing price when tickets went on sale at the Bradley Center in Milwaukee, 9,000 tickets sold in the first 10 minutes and all were gone after 20 minutes Scalpers some tickets were available from scalpers, ticket brokers, or on the Internet at higher prices a web site offered tickets for Dallas American Airlines Center concert for $540 to $1,015 according to a survey, the average price of a resold ticket at the Philadelphia First Union Center concert was $280 Springsteen’s pricing says he set the price relatively low to give value to his fans (in addition, he may have helped promote his new album) assuming that he could have sold all the tickets at $280, he gave almost $3 million of consumer surplus to his Philadelphia fans — double the ticket revenue for that concert Ef