Supply and demand: markets and welfare

Сентябрь 7, 2022

Главная
Экономика
Supply and demand: markets and welfare

Содержание

2. 7 Consumers, Producers, and the Efficiency of Markets
3. REVISITING THE MARKET EQUILIBRIUM Do the equilibrium price and quantity maximize the total welfare of buyers
4. Welfare Economics Welfare economics is the study of how the allocation of resources affects economic well-being.
5. Welfare Economics Equilibrium in the market results in maximum benefits, and therefore maximum total welfare for
6. Welfare Economics Consumer surplus measures economic welfare from the buyer’s side. Producer surplus measures economic welfare
7. CONSUMER SURPLUS Willingness to pay is the maximum amount that a buyer will pay for a
8. CONSUMER SURPLUS Consumer surplus is the buyer’s willingness to pay for a good minus the amount
9. Table 1 Four Possible Buyers’ Willingness to Pay Copyright©2004 South-Western
10. CONSUMER SURPLUS The market demand curve depicts the various quantities that buyers would be willing and
11. The Demand Schedule and the Demand Curve
12. Figure 1 The Demand Schedule and the Demand Curve Copyright©2003 Southwestern/Thomson Learning Price of Album 0
13. Figure 2 Measuring Consumer Surplus with the Demand Curve Copyright©2003 Southwestern/Thomson Learning (a) Price = $80
14. Figure 2 Measuring Consumer Surplus with the Demand Curve Copyright©2003 Southwestern/Thomson Learning (b) Price = $70
15. Using the Demand Curve to Measure Consumer Surplus The area below the demand curve and above
16. Figure 3 How the Price Affects Consumer Surplus Copyright©2003 Southwestern/Thomson Learning Quantity (a) Consumer Surplus at
17. Figure 3 How the Price Affects Consumer Surplus Copyright©2003 Southwestern/Thomson Learning Quantity (b) Consumer Surplus at
18. What Does Consumer Surplus Measure? Consumer surplus, the amount that buyers are willing to pay for
19. PRODUCER SURPLUS Producer surplus is the amount a seller is paid for a good minus the
20. Table 2 The Costs of Four Possible Sellers Copyright©2004 South-Western
21. Using the Supply Curve to Measure Producer Surplus Just as consumer surplus is related to the
22. The Supply Schedule and the Supply Curve
23. Figure 4 The Supply Schedule and the Supply Curve
24. Using the Supply Curve to Measure Producer Surplus The area below the price and above the
25. Figure 5 Measuring Producer Surplus with the Supply Curve Copyright©2003 Southwestern/Thomson Learning Quantity of Houses Painted
26. Figure 5 Measuring Producer Surplus with the Supply Curve Copyright©2003 Southwestern/Thomson Learning Quantity of Houses Painted
27. Figure 6 How the Price Affects Producer Surplus Copyright©2003 Southwestern/Thomson Learning Quantity (a) Producer Surplus at
28. Figure 6 How the Price Affects Producer Surplus Copyright©2003 Southwestern/Thomson Learning Quantity (b) Producer Surplus at
29. MARKET EFFICIENCY Consumer surplus and producer surplus may be used to address the following question: Is
30. MARKET EFFICIENCY Consumer Surplus = Value to buyers – Amount paid by buyers and Producer Surplus
31. MARKET EFFICIENCY Total surplus = Consumer surplus + Producer surplus or Total surplus = Value to
32. MARKET EFFICIENCY Efficiency is the property of a resource allocation of maximizing the total surplus received
33. MARKET EFFICIENCY In addition to market efficiency, a social planner might also care about equity –
34. Figure 7 Consumer and Producer Surplus in the Market Equilibrium Copyright©2003 Southwestern/Thomson Learning Price 0 Quantity
35. MARKET EFFICIENCY Three Insights Concerning Market Outcomes Free markets allocate the supply of goods to the
36. Figure 8 The Efficiency of the Equilibrium Quantity Copyright©2003 Southwestern/Thomson Learning Quantity Price 0
37. Evaluating the Market Equilibrium Because the equilibrium outcome is an efficient allocation of resources, the social
38. Evaluating the Market Equilibrium Market Power If a market system is not perfectly competitive, market power
39. Evaluating the Market Equilibrium Externalities created when a market outcome affects individuals other than buyers and
40. Summary Consumer surplus equals buyers’ willingness to pay for a good minus the amount they actually
41. Summary Producer surplus equals the amount sellers receive for their goods minus their costs of production.
42. Summary An allocation of resources that maximizes the sum of consumer and producer surplus is said
44. Скачать презентацию

Слайд 2

7
Consumers, Producers, and the Efficiency of Markets

Слайд 3

REVISITING THE MARKET EQUILIBRIUM
Do the equilibrium price and quantity maximize the

total welfare of buyers and sellers?
Market equilibrium reflects the way markets allocate scarce resources.
Whether the market allocation is desirable can be addressed by welfare economics.

Слайд 4

Welfare Economics
Welfare economics is the study of how the allocation of

resources affects economic well-being.
Buyers and sellers receive benefits from taking part in the market.
The equilibrium in a market maximizes the total welfare of buyers and sellers.

Слайд 5

Welfare Economics
Equilibrium in the market results in maximum benefits, and therefore

maximum total welfare for both the consumers and the producers of the product.

Слайд 6

Welfare Economics
Consumer surplus measures economic welfare from the buyer’s side.
Producer surplus

measures economic welfare from the seller’s side.

Слайд 7

CONSUMER SURPLUS
Willingness to pay is the maximum amount that a buyer

will pay for a good.
It measures how much the buyer values the good or service.

Слайд 8

CONSUMER SURPLUS
Consumer surplus is the buyer’s willingness to pay for a

good minus the amount the buyer actually pays for it.

Слайд 9

Table 1 Four Possible Buyers’ Willingness to Pay
Copyright©2004 South-Western

Слайд 10

CONSUMER SURPLUS
The market demand curve depicts the various quantities that buyers

would be willing and able to purchase at different prices.

Слайд 11

The Demand Schedule and the Demand Curve

Слайд 12

Figure 1 The Demand Schedule and the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
Price

Album

Quantity of

Albums

Слайд 13

Figure 2 Measuring Consumer Surplus with the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
(a)

Price = $80

Price of

Album

$100

Quantity of

Albums

Слайд 14

Figure 2 Measuring Consumer Surplus with the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
(b)

Price = $70

Price of

Album

$100

Quantity of

Albums

Слайд 15

Using the Demand Curve to Measure Consumer Surplus
The area below the

demand curve and above the price measures the consumer surplus in the market.

Слайд 16

Figure 3 How the Price Affects Consumer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(a) Consumer

Surplus at Price

Price

Слайд 17

Figure 3 How the Price Affects Consumer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(b) Consumer

Surplus at Price

Price

Слайд 18

What Does Consumer Surplus Measure?
Consumer surplus, the amount that buyers are

willing to pay for a good minus the amount they actually pay for it, measures the benefit that buyers receive from a good as the buyers themselves perceive it.

Слайд 19

PRODUCER SURPLUS
Producer surplus is the amount a seller is paid for

a good minus the seller’s cost.
It measures the benefit to sellers participating in a market.

Слайд 20

Table 2 The Costs of Four Possible Sellers
Copyright©2004 South-Western

Слайд 21

Using the Supply Curve to Measure Producer Surplus
Just as consumer surplus

is related to the demand curve, producer surplus is closely related to the supply curve.

Слайд 22

The Supply Schedule and the Supply Curve

Слайд 23

Figure 4 The Supply Schedule and the Supply Curve

Слайд 24

Using the Supply Curve to Measure Producer Surplus
The area below the

price and above the supply curve measures the producer surplus in a market.

Слайд 25

Figure 5 Measuring Producer Surplus with the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Quantity

Houses Painted

Price of

House

Painting

500

800

$900

600

(a) Price = $600

Слайд 26

Figure 5 Measuring Producer Surplus with the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Quantity

Houses Painted

Price of

House

Painting

500

800

$900

600

(b) Price = $800

Слайд 27

Figure 6 How the Price Affects Producer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(a) Producer

Surplus at Price

Price

Слайд 28

Figure 6 How the Price Affects Producer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(b) Producer

Surplus at Price

Price

Supply

Initial

producer

surplus

Слайд 29

MARKET EFFICIENCY
Consumer surplus and producer surplus may be used to address

the following question:
Is the allocation of resources determined by free markets in any way desirable?

Слайд 30

MARKET EFFICIENCY
Consumer Surplus
= Value to buyers – Amount paid by

buyers
and
Producer Surplus
= Amount received by sellers – Cost to sellers

Слайд 31

MARKET EFFICIENCY
Total surplus
= Consumer surplus + Producer surplus
or
Total surplus
=

Value to buyers – Cost to sellers

Слайд 32

MARKET EFFICIENCY
Efficiency is the property of a resource allocation of maximizing

the total surplus received by all members of society.

Слайд 33

MARKET EFFICIENCY
In addition to market efficiency, a social planner might also

care about equity – the fairness of the distribution of well-being among the various buyers and sellers.

Слайд 34

Learning

Price

Quantity

Слайд 35

MARKET EFFICIENCY
Three Insights Concerning Market Outcomes
Free markets allocate the supply

of goods to the buyers who value them most highly, as measured by their willingness to pay.
Free markets allocate the demand for goods to the sellers who can produce them at least cost.
Free markets produce the quantity of goods that maximizes the sum of consumer and producer surplus.

Слайд 36

Слайд 37

Evaluating the Market Equilibrium
Because the equilibrium outcome is an efficient allocation

of resources, the social planner can leave the market outcome as he/she finds it.
This policy of leaving well enough alone goes by the French expression laissez faire.

Слайд 38

Evaluating the Market Equilibrium
Market Power
If a market system is not

perfectly competitive, market power may result.
Market power is the ability to influence prices.
Market power can cause markets to be inefficient because it keeps price and quantity from the equilibrium of supply and demand.

Слайд 39

Evaluating the Market Equilibrium
Externalities
created when a market outcome affects individuals

other than buyers and sellers in that market.
cause welfare in a market to depend on more than just the value to the buyers and cost to the sellers.
When buyers and sellers do not take externalities into account when deciding how much to consume and produce, the equilibrium in the market can be inefficient.

Слайд 40

Summary
Consumer surplus equals buyers’ willingness to pay for a good minus

the amount they actually pay for it.
Consumer surplus measures the benefit buyers get from participating in a market.
Consumer surplus can be computed by finding the area below the demand curve and above the price.

Слайд 41

Summary
Producer surplus equals the amount sellers receive for their goods minus

their costs of production.
Producer surplus measures the benefit sellers get from participating in a market.
Producer surplus can be computed by finding the area below the price and above the supply curve.

Слайд 42

Summary
An allocation of resources that maximizes the sum of consumer and

producer surplus is said to be efficient.
Policymakers are often concerned with the efficiency, as well as the equity, of economic outcomes.

Supply and demand: markets and welfare

Содержание

7Consumers, Producers, and the Efficiency of Markets

REVISITING THE MARKET EQUILIBRIUMDo the equilibrium price and quantity maximize the

Welfare EconomicsWelfare economics is the study of how the allocation of

Welfare EconomicsEquilibrium in the market results in maximum benefits, and therefore

Welfare EconomicsConsumer surplus measures economic welfare from the buyer’s side.Producer surplus

CONSUMER SURPLUSWillingness to pay is the maximum amount that a buyer

CONSUMER SURPLUSConsumer surplus is the buyer’s willingness to pay for a

Table 1 Four Possible Buyers’ Willingness to PayCopyright©2004 South-Western

CONSUMER SURPLUSThe market demand curve depicts the various quantities that buyers

The Demand Schedule and the Demand Curve

Figure 1 The Demand Schedule and the Demand CurveCopyright©2003 Southwestern/Thomson LearningPrice

Figure 2 Measuring Consumer Surplus with the Demand CurveCopyright©2003 Southwestern/Thomson Learning(a)

Figure 2 Measuring Consumer Surplus with the Demand CurveCopyright©2003 Southwestern/Thomson Learning(b)

Using the Demand Curve to Measure Consumer SurplusThe area below the

Figure 3 How the Price Affects Consumer SurplusCopyright©2003 Southwestern/Thomson LearningQuantity(a) Consumer

Figure 3 How the Price Affects Consumer SurplusCopyright©2003 Southwestern/Thomson LearningQuantity(b) Consumer

What Does Consumer Surplus Measure?Consumer surplus, the amount that buyers are

PRODUCER SURPLUSProducer surplus is the amount a seller is paid for

Table 2 The Costs of Four Possible SellersCopyright©2004 South-Western

Using the Supply Curve to Measure Producer SurplusJust as consumer surplus

The Supply Schedule and the Supply Curve

Figure 4 The Supply Schedule and the Supply Curve

Using the Supply Curve to Measure Producer SurplusThe area below the

Figure 5 Measuring Producer Surplus with the Supply CurveCopyright©2003 Southwestern/Thomson LearningQuantity

Figure 5 Measuring Producer Surplus with the Supply CurveCopyright©2003 Southwestern/Thomson LearningQuantity

Figure 6 How the Price Affects Producer SurplusCopyright©2003 Southwestern/Thomson LearningQuantity(a) Producer

Figure 6 How the Price Affects Producer SurplusCopyright©2003 Southwestern/Thomson LearningQuantity(b) Producer

MARKET EFFICIENCYConsumer surplus and producer surplus may be used to address

MARKET EFFICIENCYConsumer Surplus = Value to buyers – Amount paid by

MARKET EFFICIENCYTotal surplus = Consumer surplus + Producer surplusorTotal surplus =

MARKET EFFICIENCYEfficiency is the property of a resource allocation of maximizing

MARKET EFFICIENCYIn addition to market efficiency, a social planner might also

Figure 7 Consumer and Producer Surplus in the Market EquilibriumCopyright©2003 Southwestern/Thomson

MARKET EFFICIENCY Three Insights Concerning Market OutcomesFree markets allocate the supply

Figure 8 The Efficiency of the Equilibrium QuantityCopyright©2003 Southwestern/Thomson LearningQuantityPrice0

Evaluating the Market EquilibriumBecause the equilibrium outcome is an efficient allocation

Evaluating the Market Equilibrium Market PowerIf a market system is not

Evaluating the Market Equilibrium Externalitiescreated when a market outcome affects individuals

SummaryConsumer surplus equals buyers’ willingness to pay for a good minus

SummaryProducer surplus equals the amount sellers receive for their goods minus

SummaryAn allocation of resources that maximizes the sum of consumer and

Похожие презентации

7
Consumers, Producers, and the Efficiency of Markets

REVISITING THE MARKET EQUILIBRIUM
Do the equilibrium price and quantity maximize the

Welfare Economics
Welfare economics is the study of how the allocation of

Welfare Economics
Equilibrium in the market results in maximum benefits, and therefore

Welfare Economics
Consumer surplus measures economic welfare from the buyer’s side.
Producer surplus

CONSUMER SURPLUS
Willingness to pay is the maximum amount that a buyer

CONSUMER SURPLUS
Consumer surplus is the buyer’s willingness to pay for a

Table 1 Four Possible Buyers’ Willingness to Pay
Copyright©2004 South-Western

CONSUMER SURPLUS
The market demand curve depicts the various quantities that buyers

Figure 1 The Demand Schedule and the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
Price

Figure 2 Measuring Consumer Surplus with the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
(a)

Figure 2 Measuring Consumer Surplus with the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
(b)

Using the Demand Curve to Measure Consumer Surplus
The area below the

Figure 3 How the Price Affects Consumer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(a) Consumer

Figure 3 How the Price Affects Consumer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(b) Consumer

What Does Consumer Surplus Measure?
Consumer surplus, the amount that buyers are

PRODUCER SURPLUS
Producer surplus is the amount a seller is paid for

Table 2 The Costs of Four Possible Sellers
Copyright©2004 South-Western

Using the Supply Curve to Measure Producer Surplus
Just as consumer surplus

Using the Supply Curve to Measure Producer Surplus
The area below the

Figure 5 Measuring Producer Surplus with the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Quantity

Figure 5 Measuring Producer Surplus with the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Quantity

Figure 6 How the Price Affects Producer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(a) Producer

Figure 6 How the Price Affects Producer Surplus
Copyright©2003 Southwestern/Thomson Learning
Quantity
(b) Producer

MARKET EFFICIENCY
Consumer surplus and producer surplus may be used to address

MARKET EFFICIENCY
Consumer Surplus
= Value to buyers – Amount paid by

MARKET EFFICIENCY
Total surplus
= Consumer surplus + Producer surplus
or
Total surplus
=

MARKET EFFICIENCY
Efficiency is the property of a resource allocation of maximizing

MARKET EFFICIENCY
In addition to market efficiency, a social planner might also

Figure 7 Consumer and Producer Surplus in the Market Equilibrium
Copyright©2003 Southwestern/Thomson

MARKET EFFICIENCY
Three Insights Concerning Market Outcomes
Free markets allocate the supply

Figure 8 The Efficiency of the Equilibrium Quantity
Copyright©2003 Southwestern/Thomson Learning
Quantity
Price
0

Evaluating the Market Equilibrium
Because the equilibrium outcome is an efficient allocation

Evaluating the Market Equilibrium
Market Power
If a market system is not

Evaluating the Market Equilibrium
Externalities
created when a market outcome affects individuals

Summary
Consumer surplus equals buyers’ willingness to pay for a good minus

Summary
Producer surplus equals the amount sellers receive for their goods minus

Summary
An allocation of resources that maximizes the sum of consumer and