Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.
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Transcript of Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.
![Page 1: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/1.jpg)
Lectures in Microeconomics-Charles W. Upton
The Monopolist’s Demand Curve
![Page 2: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/2.jpg)
The Monopolist’s Demand Curve
The Monopolist’s Demand Curve
• Want to develop some key propositions about the demand curve
![Page 3: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/3.jpg)
The Monopolist’s Demand Curve
The Monopolist’s Demand Curve
• Want to develop some key propositions about the demand curve
• Many of these center on elasticities
![Page 4: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/4.jpg)
The Monopolist’s Demand Curve
The Monopolist’s Demand Curve
• Want to develop some key propositions about the demand curve
• Many of these center on elasticities
• Then some applications
![Page 5: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/5.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• Recall our definition of point elasticity
Q
PSlope
![Page 6: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/6.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• Recall our definition of point elasticity
• In the case of a linear demand function
Q = a – bP
Q
PSlope
![Page 7: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/7.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• Recall our definition of point elasticity
• In the case of a linear demand function
Q = a – bP
Q
PSlope
Slope = -b
![Page 8: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/8.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• A more general definition
Q
P
dP
dQ
![Page 9: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/9.jpg)
The Monopolist’s Demand Curve
Restating the Elasticity
Q
P
dP
dQ
![Page 10: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/10.jpg)
The Monopolist’s Demand Curve
Restating the Elasticity
P
Q
dPdQ11
Q
P
dP
dQ
![Page 11: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/11.jpg)
The Monopolist’s Demand Curve
Restating the Elasticity
PP
Q
dPdQ
P
11
P
Q
dPdQ11
![Page 12: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/12.jpg)
The Monopolist’s Demand Curve
Restating the Elasticity
PP
Q
dPdQ
P
11
QdQ
dPP
1
![Page 13: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/13.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• The Monopolist cares about MR.
• There is a relation between MR and elasticity.
R = PQ
PQdQ
dP
dQ
dR
![Page 14: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/14.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• The Monopolist cares about MR.
• There is a relation between MR and elasticity.
R = PQ
PQdQ
dP
dQ
dR
![Page 15: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/15.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
• The Monopolist cares about MR.
• There is a relation between MR and elasticity.
R = PQPQ
dQ
dP
dQ
dR
PMRQdQ
dP
![Page 16: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/16.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
PQdQ
dPMR
PMRQdQ
dP
![Page 17: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/17.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
PP
Q
dQ
dPPMR
PQdQ
dPMR
PMRQdQ
dP
![Page 18: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/18.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
1P
Q
dQ
dPPMR
PP
Q
dQ
dPPMR
PQdQ
dPMRPMRQ
dQ
dP
![Page 19: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/19.jpg)
The Monopolist’s Demand Curve
Marginal Revenue and Elasticity
PMRQdQ
dP
1P
Q
dQ
dPPMR
PP
Q
dQ
dPPMR
PQdQ
dPMR
)1
1()11
(
PPMR
![Page 20: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/20.jpg)
The Monopolist’s Demand Curve
First Elasticity Relation
11PMR
![Page 21: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/21.jpg)
The Monopolist’s Demand Curve
Second Elasticity Relation
11PMR
![Page 22: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/22.jpg)
The Monopolist’s Demand Curve
Second Elasticity Relation
11PMR
MCMR
![Page 23: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/23.jpg)
The Monopolist’s Demand Curve
Second Elasticity Relation
11PMR
MCMR
11PMC
![Page 24: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/24.jpg)
The Monopolist’s Demand Curve
Second Elasticity Relation
MCP 11
![Page 25: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/25.jpg)
The Monopolist’s Demand Curve
Second Elasticity Relation
11
MCP
![Page 26: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/26.jpg)
The Monopolist’s Demand Curve
Third Elasticity Relation
MCP 11
![Page 27: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/27.jpg)
The Monopolist’s Demand Curve
Third Elasticity Relation
MCP 11
MCPP 1
![Page 28: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/28.jpg)
The Monopolist’s Demand Curve
Third Elasticity Relation
MCPP 1
1PMCP
![Page 29: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/29.jpg)
The Monopolist’s Demand Curve
Third Elasticity Relation
1PMCP
1
P
MCP
![Page 30: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/30.jpg)
The Monopolist’s Demand Curve
Third Elasticity Relation
1
P
MCP
![Page 31: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/31.jpg)
The Monopolist’s Demand Curve
A Summary
11PMR
11
MCP
1
P
MCP
![Page 32: Lectures in Microeconomics-Charles W. Upton The Monopolist’s Demand Curve.](https://reader036.fdocuments.us/reader036/viewer/2022062421/56649d4e5503460f94a2d5fd/html5/thumbnails/32.jpg)
The Monopolist’s Demand Curve
End
©2004 Charles W. Upton