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1、Managerial Economics,http:/ ppt模板下载,1,Competitive Markets,perfect competition market equilibrium supply shift demand shift adjustment time receipts 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
2、is the investment 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 thro
3、ugh retailers. 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
4、 cement is whether 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, mine
5、ral water) many buyers (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% sha
6、re. The Ministry of Finance issued production 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 qua
7、ntity demanded equals the quantity supplied excess supply triggers a price decrease excess demand triggers a price increase when 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 sup
8、ply,Quantity (Million ton-miles a year),Price ($ per ton-mile),Market Equilibrium,Managerial Economics,http:/ ppt模板下载,9,Supply Shift,supply shifts down (up) demand remains fixed lower (higher) price, larger (smaller) quantity final equilibrium depends on elasticities of demand and supply,Managerial
9、Economics,http:/ ppt模板下载,10,0,19.60,20,10,10.4,original supply,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
10、cents,60 cents,c,b,0,10,10.6,20,new supply,original supply,demand,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
11、,0,20,10,demand,a,b,original and new supply,0,10,11,19.40,20,60 cents,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 Elastic
12、ities of Supply,Managerial Economics,http:/ ppt模板下载,13,The Demand for French 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 e
13、xpensive, how will it affect the prices of foie gras and butter on world markets?,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
14、on the full reduction to consumers. What is the cause of this problem? Lack of retail 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 fixed higher (lower) price, larger (smaller) quantity f
15、inal equilibrium depends on price elasticities of demand and supply,Managerial Economics,http:/ ppt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, however, cards and roses become necessities. The price of roses always increases much more sharply than the
