3 DEMAND AND SUPPLY CHAPTER 需求與供給

Objectives 目標 After studying this chapter, you will be able to: Describe a competitive market and think about a price as an opportunity cost Explain the influences on demand Explain the influences on supply Explain how demand and supply determine prices and quantities bought and sold Use demand and supply to make predictions about changes in prices and quantities

Slide, Rocket, Roller Coaster 溜滑梯, 火箭, 雲霄飛車 Some prices slide, some rocket, and some roller coaster. This chapter explains how prices are determined and how markets guide and coordinate choices.

Markets and Prices 市場與價格 A market is any arrangement that enables buyers and sellers to get information and do business with each other. A competitive market (競爭市場)is a market that has many buyers and many sellers so no single buyer or seller can influence the price. 有很多的買方與賣方，所以沒有任何一個買方或賣方能影響價格。 The money price (貨幣價格)of a good is the amount of money needed to buy it. 是指為了要取得財貨，必須要用多少貨幣單位以交換之 The relative price (相對價格)of a good—the ratio of its money price to the money price of the next best alternative good—is its opportunity cost. 機會成本的概念 Before you jump into the demand-supply model, be sure that your students understand that a price in economics is relative price and that a relative price is an opportunity cost. Also spend some class time ensuring that they appreciate the key lessons of Chapter 2: a) Prosperity comes from specialization and exchange. b) Specialization and exchange requires the social institutions of property rights and markets. c) We must understand how markets work. You might like to explain that the most competitive markets are explicitly organized as auctions. An interesting market to describe is that at Aalsmeer in Holland, which handles a large percentage of the world’s fresh cut flowers. Roses grown in Columbia are flown to Amsterdam, auctioned at Aalsmeer, and are in vases in New York, London, and Tokyo all in less than a day. If you have an Internet connection in your classroom, you can participate in a simulation of an auction of flowers. Here is the URL (which you can also click on at the Parkin Web site) http://www.batky-howell.com/~jb/auction/daauction.cgi.

Demand 需求 If you demand something, then you: Want it, 想要 Can afford it, and 買得起 Have made a definite plan to buy it.已經計畫要買它 Wants are the unlimited desires or wishes people have for goods and services. Demand reflects a decision about which wants to satisfy. The quantity demanded of a good or service is the amount that consumers plan to buy during a particular time period, and at a particular price.

Demand 需求 What Determines Buying Plans? The amount of any particular good or service that consumers plan to buy is influenced by many factors. 1. The price of the good, 財貨的價格 什麼決定購買計畫？

Demand 需求 The Law of Demand 需求法則 The law of demand states: Other things remaining the same, the higher the price of a good, the smaller is the quantity demanded.其他條件不變下，財貨的價格愈高，需求量愈小 The law of demand results from a substitution effect 替代效果 an income effect 所得效果 Estimating the demand for Coke (or bottled water) in the classroom. Of the hundreds of classroom experiments that are available today, very few are worth the time they take to conduct. The classic demand-revealing experiment is one of the most productive and worthwhile ones. Bring to class two bottles of ice-cold, ready-to-drink Coke, bottled water, or sports drink. (If your class is very large, bring six bottles). Tell the students that you have these drinks and ask them to indicate if they would like one. Most hands will go up and you are now ready to make two points: 1. The students have just revealed a want but not a demand. 2. You don’t have enough bottles to satisfy their wants, so you need an allocation mechanism. Ask the students to suggest some allocation mechanisms. You might get suggestions such as: give them to the oldest, the youngest, the tallest, the shortest, the first-to-the-front-of-the-class. For each one, point out the difficulty/inefficiency/inequity. If no one suggests selling them to the highest bidder, tell the class that you are indeed going to do just that. Tell them that this auction is real. The winner will get the drink and will pay. Now ask for a show of hands of those who have some cash and can afford to buy a drink. Explain that these indicate an ability to buy but not a definite plan to buy. Continues on next (hidden) slide notes page.

Demand 需求 Substitution effect替代效果 —when the relative price (opportunity cost) of a good or service rises, people seek substitutes for it, so the quantity demanded decreases. . 其他條件不變，當財貨價格變貴時，其相對價格或是機會成本也隨之上升，雖然每一種財貨都是獨一無二的，但仍有替代品(substitute)，則財貨的機會成本增加時，人們對該財貨的需求量會減少，而買比較多的替代品。

Demand 需求 Income effect所得效果 —when the price of a good or service rises relative to income, people cannot afford all the things they previously bought, so the quantity demanded decreases 其他因素不變，當財貨的價格增加時，相對於所得而言，價格上升了，所以當財貨價格變貴而所得不改變時，人們沒有辦法像以前一樣買得起所有的東西，必須至少減少某些財貨的需求量，正常情況下，比較貴的財貨需求量將會減少。

Demand 需求 Demand Curve and Demand Schedule The term demand (需求)refers to the entire relationship between the price of the good and quantity demanded (需求量)of the good. demand是指財貨價格與需求量間的整體關係 quantity demanded每個特定價格下所對應的需求量 A demand curve (需求曲線)shows the relationship between the quantity demanded of a good and its price when all other influences on consumers’ planned purchases remain the same.

Demand 需求 Figure 3.1 shows a demand curve for recordable compact discs (CD-Rs). A rise in the price, other things remaining the same, brings a decrease in the quantity demanded and a movement along the demand curve.

Demand 需求 A demand curve is also a willingness-and-ability-to-pay curve. The smaller the quantity available, the higher is the price that someone is willing to pay for another unit. Willingness to pay measures marginal benefit.

Demand 需求 A Change in Demand When any factor that influences buying plans other than the price of the good changes, there is a change in demand for that good. The quantity of the good that people plan to buy changes at each and every price, so there is a new demand curve. When demand increases, the quantity that people plan to buy increases at each and every price so the demand curve shifts rightward. When demand decreases, the quantity that people plan to buy decreases at each and every price so the demand curve shifts leftward.

Demand 需求 The factors that change demand are: 1.The prices of related goods,其他相關財貨的價格 2. Expected future prices,預期未來的價格 3. Income,所得 4. Expected future income預期未來的所得 5. Population, and人口 6. Preferences.偏好

Demand 需求 Prices of related goods A substitute (替代財) is a good that can be used in place of another good. A complement (互補財)is a good that is used in conjunction with another good. When the price of substitute for CD-Rs rises or when the price of a complement for CD-Rs falls, the demand for CD-Rs increases.

Demand 需求 Figure 3.2 shows the shift in the demand curve for CD-Rs when the price of CD burner falls. Because a CD burner is a complement of a CD-R, the demand for CD-Rs increases.

Demand 需求 Expected future prices預期未來的價格 If the price of a good is expected to rise in the future, current demand increases and the demand curve shifts rightward. Income所得 When income increases, consumers buy more of most goods and the demand curve shifts rightward. A normal good (正常財)is one for which demand increases as income increases. An inferior good (劣等財)is a good for which demand decreases as income increases.

Demand 需求 Population 人口 The larger the population, the greater is the demand for all goods. Preferences 偏好 People with the same income have different demands if they have different preferences.

Demand 需求 Table 3.1 Summarize the demand for CD-Rs 需求法則 CD-R需求量 量將減少： 量將增加： CD-R的價格上升 CD-R的價格下降

Demand 需求變動 對CD-R需求的變動 Table 3.1 Summarize the demand for CD-Rs 需求減少： 需求增加： 替代品的價格下降 替代品的價格上升 互補品的價格上升 互補品的價格下降 CD-R預期未來的價格下降 CD-R預期未來的價格上升 所得減少 所得增加 人口減少 人口增加

Demand 需求 A Change in the Quantity Demanded Versus a Change in Demand Figure 3.3 illustrates the distinction between a change in demand and a change in the quantity demanded.

Demand 需求 需求量變動 (change in the quantity demanded) 沿著需求曲線上下點的移動 When the price of the good changes and everything else remains the same, there is a change in the quantity demanded and a movement along the demand curve. 沿著需求曲線上下點的移動

Demand 需求 需求變動 (change in demand) 需求曲線整條線的移動 When one of the other factors that influence buying plans changes, there is a change in demand and a shift of the demand curve. 需求曲線整條線的移動

Supply 供給 使用資源及技術以生產某種財貨， 有限的資源及技術會限制生產 If a firm supplies a good or service, then the firm: Has the resources and the technology to produce it, Can profit form producing it, and Has made a definite plan to produce and sell it. Resources and technology determine what it is possible to produce. Supply reflects a decision about which technologically feasible items to produce. The quantity supplied (供給量)of a good or service is the amount that producers plan to sell during a given time period at a particular price.在特定期間與特定的價格下，廠商願意生產及銷售的數量

Supply 供給 財貨的價格 其他相關財貨的價格 預期未來的價格 供給者或廠商多寡 技術 What Determines Selling Plans?銷售計畫的決定因素: The amount of any particular good or service that a firm plans to supply is influenced by 1. The price of the good, 2. The prices of resources needed to produce it, 3. The prices of related goods produced, 4. Expected future prices, 5. The number of suppliers, and 6. Available technology. 財貨的價格 生產資源的價格 其他相關財貨的價格 預期未來的價格 供給者或廠商多寡 技術

Supply 供給 供給法則 供給量(quantity supplied) 在特定期間與特定的價格下，廠商願意生產及銷售的數量。 The Law of Supply The law of supply states: Other things remaining the same, the higher the price of a good, the greater is the quantity supplied.其他條件不變的情況下，財貨的價格愈高，供給量就愈多。 The law of supply results from the general tendency for the marginal cost of producing a good or service to increase as the quantity produced increases (Chapter 2, page 35). Producers are willing to supply only if they at least cover their marginal cost of production. 供給量(quantity supplied) 在特定期間與特定的價格下，廠商願意生產及銷售的數量。 Estimating the supply of Coke (or bottled water) in the classroom. (It is best to do this next classroom activity on a different day from the demand experiment.) Tell the students that you would like a Coke (or other drink) that is available from a machine somewhere near the classroom and you want someone to get it for you. You are going to continue teaching while the student is out of the room and you will be giving hints about what is on the next test. Ask the students to raise their hand if they are willing to fetch one can of Coke if you pay $5.00. Write down the number. Lower the price you’ve willing to pay in $1 increments until the number of students willing to fetch you the drink begins to decrease. Keep track of the numbers. Lower the price you’re willing to pay in 25¢ increments until you get close to only having one student willing to fetch you the drink. Keep track of the numbers. Lower the price in smaller increments if necessary until just one student is willing to fetch you a drink. Continues on next (hidden) slide notes page.

Supply 供給 Supply Curve and Supply Schedule The term supply (供給)refers to the entire relationship between the quantity supplied and the price of a good. The supply curve (供給曲線) shows the relationship between the quantity supplied of a good and its price when all other influences on producers’ planned sales remain the same.

Supply 供給 Figure 3.4 shows a supply curve of recordable compact discs (CD-Rs). A rise in the price, other things remaining the same, brings an increase in the quantity supplied and a movement along the supply curve.

Supply 供給 A supply curve is also a minimum-supply-price curve. The greater the quantity produced, the higher is the price that a firm must offered to be willing to produce that quantity. 供給曲線也可解釋為廠商在特定產量下,願意生產該產量所要求的最低價格曲線

Supply 供給 供給變動 A Change in Supply When any factor that influences selling plans other than the price of the good changes, there is a change in supply of that good. The quantity of the good that producers plan to sell changes at each and every price, so there is a new supply curve. When supply increases, the quantity that producers plan to sell increases at each and every price so the supply curve shifts rightward. When supply decreases, the quantity that producers plan to sell decreases at each and every price so the supply curve shifts leftward. 供給變動

Supply 供給 Table 3.2 (page 67) summarizes the factors that change supply. They are: Prices of productive resources If the price of resource used to produce a good rises, the minimum price that a supplier is willing to accept for producing each quantity of that good rises. So a rise in the price of productive resources decreases supply and shifts the supply curve leftward.(左上移) 生產資源的價格

Supply 供給 Prices of related goods produced 其他相關財貨的價格變動 A substitute in production for a good is another good that can be produced using the same resources. Goods are compliments in production if they must be produced together. 註:量的方面,前者一增一減,後者同增同減 The supply of a good increases and its supply curve shifts rightward if the price of a substitute in production falls or if the price of a complement in production rises. 其他相關財貨的價格變動 消費上的關係 生產上的關係

Supply 供給 預期未來的價格 Expected future prices If the price of a good is expected to fall in the future, current supply increases and the supply curve shifts rightward. The number of suppliers The larger the number of suppliers of a good, the greater is the supply of the good. An increase in the number of suppliers shifts the supply curve rightward. 預期未來的價格 供給者多寡

Supply 供給 技術 Technology Advances in technology create new products and lower the cost of producing existing products, so they increase supply and shift the supply curve rightward.

Supply 供給 Figure 3.5 shows how an advance in the technology for producing CD-Rs increases the supply of CD-Rs and shifts the supply curve for CD-Rs rightward.

Supply 供給 A Change in the Quantity Supplied Versus a Change in Supply Figure 3.6 illustrates the distinction between a change in supply (供給) and a change in the quantity supplied(供給量).

Supply 供給 When the price of the good changes and other influences on selling plans remain the same, there is a change in the quantity supplied (供給量的變動). and a movement along the supply curve.

Supply 供給 When one of the other factors that influence selling plans changes, there is a change in supply (供給的變動)and a shift of the supply curve.

Table 3.2 Summary 供給法則 CD-R供給量 量將減少： 量將增加： CD-R價格下降 CD-R價格上升

供給變動 CD-R供給 供給減少： 供給增加： 生產CD-R使用的資源價格上升 生產CD-R使用的資源價格下降 替代品價格上升 替代品價格下降 互補品價格下降 互補品價格上升 CD-R預期未來的價格上升 CD-R預期未來的價格下降 生產CD-R廠商家數減少 生產CD-R廠商家數增加 較差的生產技術 較好的生產技術

Market Equilibrium 市場均衡 Equilibrium is a situation in which opposing forces balance each other. Equilibrium in a market occurs when the price balances the plans of buyers and sellers. 簡言之,均衡為買賣雙方力量平衡的結果 The equilibrium price (均衡價格) is the price at which the quantity demanded equals the quantity supplied.供給量等於需求量的情況之下所得到的價格 The equilibrium quantity is the quantity bought and sold at the equilibrium price.買賣雙方在均衡價格之下所決定的數量 The magic of market equilibrium and the forces that bring it about and keep the market there need to be demonstrated with the basic diagram, with intuition, and, if you’ve got the time, with hard evidence in the form of further class activity. You might want to begin with the demand curve experiment and explain that in that market, the supply was fixed (vertical supply curve) at the quantity of bottles that you brought to class. The equilibrium occurred where the market demand curve (demand by the students) intersected your supply curve. Then you might use the supply curve experiment and explain that in that market, demand was fixed (vertical demand curve) at the quantity that you had decided to buy. The equilibrium occurred where the market supply curve (supply by the students) intersected your demand curve. Point out that the trades you made in your little economy made buyers and sellers better off. If you want to devote a class to equilibrium and the gains from trade in a market, you might want to run a double oral auction. There are lots of descriptions of these and one of the best is at Marcelo Clerici-Arias’s Web site at Stanford University—http://www.stanford.edu/~marcelo/index.html?Teaching/Docs/Experiments/Auction/auction.htm~mainFrame

市場運作的結果都會朝均衡點移動，因為 價格會限制買賣雙方的計畫 當雙方計畫不配合時，價格會自動調整。 Market Equilibrium Price regulates buying and selling plans. 市場均衡 市場運作的結果都會朝均衡點移動，因為 價格會限制買賣雙方的計畫 當雙方計畫不配合時，價格會自動調整。 Price adjusts when plans don’t match. Economics, 6th, Parkin, 2004, Chapter 3: 需求與供給 [第42頁]

Market Equilibrium 價格作為管制工具 市場均衡 Price as a Regulator Figure 3.7 illustrates the equilibrium price and equilibrium quantity in the market for CD-Rs. If the price of a disc is $2, the quantity supplied exceeds the quantity demanded and there is a surplus (超額供給) of discs.

Market Equilibrium 市場均衡 If the price of a disc is $1, the quantity demanded exceeds the quantity supplied and there is a shortage (供給短缺)of discs. If the price of a disc is $1.50, the quantity demanded equals the quantity supplied and there is neither a shortage nor a surplus of discs.

Market Equilibrium 市場均衡 短缺將促使價格上升 生產過剩促使價格下降 買賣雙方最好的交易狀況:均衡 Price Adjustments 價格調整 At prices below the equilibrium, a shortage forces the price up. 短缺將促使價格上升 At prices above the equilibrium, a surplus forces the price down. 生產過剩促使價格下降 At the equilibrium price, buying plans selling plans agree and the price doesn’t change. 買賣雙方最好的交易狀況:均衡

Predicting Changes in Price and Quantity 預測價格與數量的變動 Because the price rises if it is below equilibrium, falls if it is above equilibrium, and remains constant if it is at the equilibrium, the price is pulled toward the equilibrium and remains there until some event changes the equilibrium. A change in price stems from a change in demand, a change in supply, or a change in both S and D.

Predicting Changes in Price and Quantity 預測價格與數量的變動 A Change in Demand Figure 3.8 shows the effect of a change in demand. An increase in demand shifts the demand curve rightward and creates a shortage at the original price. The whole chapter builds up to this section, which now brings all the elements of demand, supply, and equilibrium together to make predictions. Students are remarkably ready to guess the consequences of some event that changes either demand or supply or both. They must be encouraged to work out the answer and draw the diagram. Explain that the way to answer any question that seeks a prediction about the effects of some events on a market has five steps. Walk them through the steps and have one or two students work some examples in front of the class. The five steps are: 1.Draw a demand-supply diagram and label the axes with the price and quantity of the good or service in question. 2. Think about the events that you are told occur and decide whether they change demand, supply, both demand and supply, or neither demand nor supply. 3. Do the events that change demand or supply bring an increase or a decrease? 4. Draw the new demand curve and supply curve on the diagram. Be sure to shift the curves in the correct direction—leftward for decrease and rightward for increase. (Lots of students want to move the curves upward for increase and downward for decrease—works ok for demand but exactly wrong for supply. Emphasize the left-right shift.) 5. Find the new equilibrium and compare it with the original one. Walk them through the steps and have one or two students work some examples in front of the class. It is critical at this stage to return to the distinction between a change in demand (supply) and a change in the quantity demanded (supplied). You can now use these distinctions to describe the effects of events that change market outcomes. At this point, the students know enough for it to be worthwhile emphasizing the magic of the market’s ability to coordinate plans and reallocate resources. The price rises and the quantity supplied increases.

Predicting Changes in Price and Quantity 預測價格與數量的變動 A Change in Supply Figure 3.9 shows the effect of a change in supply. An increase in supply shifts the supply curve rightward and creates a surplus at the original price. The price falls and the quantity demanded increases and quantity supplied decreases.

Predicting Changes in Price and Quantity 預測價格與數量的變動 A Change in Both Demand and Supply A change both demand and supply changes the equilibrium price and the equilibrium quantity but we need to know the relative magnitudes of the changes to predict some of the consequences.

Predicting Changes in Price and Quantity 預測價格與數量的變動 Figure 3.10 shows the effects of a change in both demand and supply in the same direction. An increase in both demand and supply increases the equilibrium quantity but has an uncertain effect on the equilibrium price.

Predicting Changes in Price and Quantity 預測價格與數量的變動 Figure 3.11 shows the effects of a change in both demand and supply when they change in opposite directions. An increase in supply and a decrease in demand lowers the equilibrium price but has an uncertain effect on the equilibrium quantity.

1. 需求減少與供給增加同時發生 2. 需求增加與供給減少同時發生 均衡價格將下降 均衡數量可能增加、減少、或維持不變 均衡價格將上升 Economics, 6th, Parkin, 2004, Chapter 3: 需求與供給 [第52頁]

3.需求與供給同時增加 均衡價格可能增加、減少、或維持不變 均衡數量將增加 3.需求與供給同時減少 均衡價格可能增加、減少、或維持不變 均衡數量將減少

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