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1、Managerial Economics,http:/ppt模板下载,1,Competitive Markets,perfect competitionmarket equilibriumsupply shiftdemand shiftadjustment timereceipts vis-vis incidence,Managerial Economics,http:/ppt模板下载,2,Question-1,A shipping lines major variable costs are fuel and labor,while its major fixed cost is the i
2、nvestment in the vessels.If the cost of fuel drops by 15%,what will be the effect on the price and quantity of shipping services?What will be the effect of an interest rate cut?,Managerial Economics,http:/ppt模板下载,3,Question-2,Manufacturers of consumer goods often sell their products through retailer
3、s.Manufacturers frequently complain that,when they reduce wholesale prices,their retailers do not reduce retail prices by the same amount.What is the source of this“problem”?,Managerial Economics,http:/ppt模板下载,4,Question-3,A major issue for manufacturers of industrial goods such as cement is whether
4、 their prices should include the costs of shipment to the consumer.How would the market for cement be affected if manufacturers switched from pricing inclusive of freight to ex-works pricing?,Managerial Economics,http:/ppt模板下载,5,Perfect Competition,homogeneous product(gold,mineral water)many buyers(
5、gold,uranium)many sellers(silver,platinum)free entry and exit(internet service),equal information(photocopy services,medical services),Managerial Economics,http:/ppt模板下载,6,The Japanese Beer Market,Until 1994,the four domestic manufacturers controlled over a 95%share.The Ministry of Finance issued pr
6、oduction licenses to brewers with a minimum of 2m Liters a year and limited sales licenses to small family-owned stores that tended to stick with the big four brewers.,Managerial Economics,http:/ppt模板下载,7,Market Equilibrium,Definition:the price at which the quantity demanded equals the quantity supp
7、liedexcess supply triggers a price decreaseexcess demand triggers a price increasewhen market is not in equilibrium,market forces push price towards equilibrium,Managerial Economics,http:/ppt模板下载,8,0,20,22,8,10,11,supply,demand,a,b,c,equilibrium,excess supply,Quantity(Million ton-miles a year),Price
8、($per ton-mile),Market Equilibrium,Managerial Economics,http:/ppt模板下载,9,Supply Shift,supply shifts down(up)demand remains fixedlower(higher)price,larger(smaller)quantityfinal equilibrium depends on elasticities of demand and supply,Managerial Economics,http:/ppt模板下载,10,0,19.60,20,10,10.4,original su
9、pply,new supply,demand,60 cents,60 cents,c,e,b,d,Quantity(Million ton-miles a year),Price($per ton-mile),a,Supply Shift,Managerial Economics,http:/ppt模板下载,11,Price Elasticities of Demand,0,10,19.40,20,original supply,new supply,demand,60 cents,60 cents,c,b,0,10,10.6,20,new supply,original supply,dem
10、and,60 cents,60 cents,b,c,Extremely inelastic demand,Extremely elastic demand,Quantity(Million ton-miles a year),Quantity(Million ton-miles a year),Price($per ton-mile),Price($per ton-mile),e,e,Managerial Economics,http:/ppt模板下载,12,0,20,10,demand,a,b,original and new supply,0,10,11,19.40,20,60 cents
11、,60 cents,a,b,original supply,new supply,demand,Price($per ton-mile),Price($per ton-mile),Quantity(Million ton-miles a year),Quantity(Million ton-miles a year),Extremely inelastic supply,Extremely elastic supply,Price Elasticities of Supply,Managerial Economics,http:/ppt模板下载,13,The Demand for French
12、 Products,The supplies of French agriculture products(such as foie gras and butter)to world markets depend on the exchange rate between the French franc and other world currencies.Suppose that the franc becomes 10%more expensive,how will it affect the prices of foie gras and butter on world markets?
13、,Managerial Economics,http:/ppt模板下载,14,Wholesale Price Cuts,A frequent complaint among manufacturers of consumer goods is that,when they reduce wholesale prices,their retailers take bigger margins instead of passing on the full reduction to consumers.What is the cause of this problem?Lack of retail
14、competition,or the price elasticities of retail demand and supply.,Managerial Economics,http:/ppt模板下载,15,Demand Shift,demand shifts up(down)supply remains fixedhigher(lower)price,larger(smaller)quantityfinal equilibrium depends on price elasticities of demand and supply,Managerial Economics,http:/pp
15、t模板下载,16,0,20,10,10.8,supply,new demand,original demand,1 million,a,f,b,c,1 million,Quantity(Million ton-miles a year),Price($per ton-mile),Demand Shift,Managerial Economics,http:/ppt模板下载,17,Supply on Valentines Day,People buy greeting cards and roses throughout the year.As Valentines Day approaches
16、,however,cards and roses become necessities.The price of roses always increases much more sharply than the price of greeting cards.Why?,Managerial Economics,http:/ppt模板下载,18,Adjustment Time,short run demand+supply short run equilibriumlong run demand+supply long run equilibrium,Managerial Economics,
17、http:/ppt模板下载,19,0,20,22,100,105,price,short-runaveragevariable cost,short-runmarginal cost,Quantity(Thousand ton-miles a year),Quantity(Thousand ton-miles a year),0,20,22,10,12,short-rundemand,short-runsupply,1 million,a,c,Price($per ton-mile),Price($per ton-mile),(a)Individual seller,(b)Market,Sho
18、rt-Run Market Equilibrium,Managerial Economics,http:/ppt模板下载,20,0,20,21,100,original long-run averagecost,new long-runaverage cost,long-runmarginal cost,Quantity(Thousand ton-miles a year),Quantity(Thousand ton-miles a year),0,20,21,10,13,long-rundemand,long-runsupply,1 million,a,d,Price($per ton-mi
19、le),Price($per ton-mile),(a)Individual seller,(b)Market,Long-Run Market Equilibrium,Managerial Economics,http:/ppt模板下载,21,General Principles,In response to shifts in demand and/or supply,the market price is more volatile in the short run than the long run.there is a greater change in the market quan
20、tity over the long run than in the short run.,Managerial Economics,http:/ppt模板下载,22,0,1.50,1,CF supply,a,Quantity(Million pounds a year),Price($per pound),ex-works supply,CF demand,ex-works demand,b,25 cents,25 cents,Pricing and Freight Cost,Managerial Economics,http:/ppt模板下载,23,Promoting Retail Sal
21、es,Cents-off couponsWhen consumers make purchases,they can redeem the coupons and get the full price reduction.Cuts in wholesale priceAssuming that all consumers use coupons,there is no difference between coupons and a direct cut in the wholesale price.,Managerial Economics,http:/ppt模板下载,24,“In California,the seller always pays the brokers commission,so,buyers get brokerage services free.”,
