ch16 均衡.ppt

Chapter Sixteen,Equilibrium均衡,Structure,Market equilibriumQuantity tax and equilibriumTax incidence（税收分担）Deadweight loss（额外净损失）,Market Equilibrium,A market is in equilibrium when total quantity demanded by buyers equals total quantity supplied by sellers.Also called“market is cleared”Supply may not equal production,Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),Market Setting,Competitive marketContestable market,Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),p*,q*,D(p*)=S(p*);the marketis in equilibrium.,Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),p*,S(p),D(p)S(p);an excessof quantity supplied overquantity demanded.,p,D(p),Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),p*,S(p),D(p)S(p);an excessof quantity supplied overquantity demanded.,p,D(p),Market price must fall towards p*.,Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),p*,D(p”),D(p”)S(p”);an excessof quantity demandedover quantity supplied.,p”,S(p”),Market Equilibrium,p,D(p),S(p),q=D(p),Marketdemand,Marketsupply,q=S(p),p*,D(p”),D(p”)S(p”);an excessof quantity demandedover quantity supplied.,p”,S(p”),Market price must rise towards p*.,Market Equilibrium Linear D&S,At the equilibrium price p*,D(p*)=S(p*).That is,which gives,and,Market Equilibrium,p,D(p),S(p),D(p)=a-bp,Marketdemand,Marketsupply,S(p)=c+dp,Market Equilibrium,Can we calculate the market equilibrium using the inverse market demand and supply curves?Yes,it is the same calculation.,Market Equilibrium,the equation of the inverse marketdemand curve.And,the equation of the inverse marketsupply curve.,Market Equilibrium,q,D-1(q),S-1(q),D-1(q)=(a-q)/b,Market inversedemand,S-1(q)=(-c+q)/d,p*,q*,At equilibrium,D-1(q*)=S-1(q*).,Market inverse supply,Market Equilibrium,and,At the equilibrium quantity q*,D-1(p*)=S-1(p*).That is,which gives,and,Market Equilibrium,q,D-1(q),S-1(q),D-1(q)=(a-q)/b,Marketdemand,Marketsupply,S-1(q)=(-c+q)/d,Market Equilibrium,Two special cases:quantity supplied is fixed,independent of the market price,andquantity supplied is extremely sensitive to the market price.,Market Equilibrium,S(p)=c+dp,so d=0and S(p)c.,p,q,q*=c,Market quantity supplied isfixed,independent of price.,Market Equilibrium,S(p)=c+dp,so d=0and S(p)c.,p,q,p*,D-1(q)=(a-q)/b,Marketdemand,q*=c,Market quantity supplied isfixed,independent of price.,Market Equilibrium,S(p)=c+dp,so d=0and S(p)c.,p,q,p*=(a-c)/b,D-1(q)=(a-q)/b,Marketdemand,q*=c,p*=D-1(q*);that is,p*=(a-c)/b.,Market quantity supplied isfixed,independent of price.,Market Equilibrium,