ch15 Market Demand.ppt

Chapter Fifteen
Market Demand
市场需求
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, …,n.
Consumer i’s ordinary demand function modity j is
From Individual to Market Demand Functions
When all consumers are price-takers, the market demand function modity j is
If all consumers are identical then where M = nm.
From Individual to Market Demand Functions
The market demand curve is the “horizontal sum” of the individual consumers’ demand curves.
. suppose there are only two consumers; i = A,B.
From Individual to Market Demand Functions
p1
p1
20
15
p1’
p1”
p1’
p1”
From Individual to Market Demand Functions
p1
p1
p1
20
15
p1’
p1”
p1’
p1”
p1’
From Individual to Market Demand Functions
p1
p1
p1
20
15
p1’
p1”
p1’
p1”
p1’
p1”
From Individual to Market Demand Functions
p1
p1
p1
20
15
35
p1’
p1”
p1’
p1”
p1’
p1”
The “horizontal sum”of the demand curvesof individuals A and B.
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