nicholson微观经济理论（答案+PPT+习题库）-ch10.pptVIP

Chapter 10 THE PARTIAL EQUILIBRIUM COMPETITIVE MODEL Market Demand Assume that there are only two goods (x and y) An individual’s demand for x is Quantity of x demanded = x(px,py,I) If we use i to reflect each individual in the market, then the market demand curve is Market Demand To construct the market demand curve, PX is allowed to vary while Py and the income of each individual are held constant If each individual’s demand for x is downward sloping, the market demand curve will also be downward sloping Market Demand Shifts in the MarketDemand Curve The market demand summarizes the ceteris paribus relationship between X and px changes in px result in movements along the curve (change in quantity demanded) changes in other determinants of the demand for X cause the demand curve to shift to a new position (change in demand) Shifts in Market Demand Suppose that individual 1’s demand for oranges is given by x1 = 10 – 2px + 0.1I1 + 0.5py and individual 2’s demand is x2 = 17 – px + 0.05I2 + 0.5py The market demand curve is X = x1 + x2 = 27 – 3px + 0.1I1 + 0.05I2 + py Shifts in Market Demand To graph the demand curve, we must assume values for py, I1, and I2 If py = 4, I1 = 40, and I2 = 20, the market demand curve becomes X = 27 – 3px + 4 + 1 + 4 = 36 – 3px Shifts in Market Demand If py rises to 6, the market demand curve shifts outward to X = 27 – 3px + 4 + 1 + 6 = 38 – 3px note that X and Y are substitutes If I1 fell to 30 while I2 rose to 30, the market demand would shift inward to X = 27 – 3px + 3 + 1.5 + 4 = 35.5 – 3px note that X is a normal good for both buyers Generalizations Suppose that there are n goods (xi, i = 1,n) with prices pi, i = 1,n. Assume that there are m individuals in the economy The j th’s demand for the i th good will depend on all prices and on Ij xij = xij(p1,…,pn, Ij) Generalizations The market demand function for xi is the sum of each individual’s demand for that good Elasticity of Market Demand The price elasticity of market demand i