Home Page Mind Map Details
Notes on equilibrium price theory in microeconomics

Notes on equilibrium price theory in microeconomics

2026-08-18 0 Report
Notes on equilibrium price theory in microeconomics
Expand
Related Recommendations
Other works by the author
Outline/Content
See more
Need
Meaning
Willing and able
Influencing factors
Price factor (most basic)
The price of the product itself (inversely proportional)
Non-price factors
Income level
Normal product - proportional
Low-grade products-inverse ratio
Related product prices
Substitutes - Proportional
Complements - inverse ratio
Consumer Preference - Proportional
Consumer expectations for commodity prices - direct ratio
Demand functions and demand curves
Demand function
Qd=f(p)
Need to go online
Sloping to the lower right, the slope is negative
Changes in quantity demanded and changes in demand
Change in demand
Caused by price changes of the commodity itself
Performance: point movement
Changes in demand
Caused by changes in other factors
Performance: line movement
Factors affecting defense expenditure demand
National security environment
International political factors
Military strategy
Supply
Meaning
Willing and able
Influencing factors
Price factor
The price of the product itself - proportional
Non-price factors
Generation cost - inverse ratio
Technical level - proportional
Price of related items - Uncertain
Generator's expectations for the future
Supply function and supply curve
Supply function
Qs=f（P）
Supply curve
Sloping to the upper right, the slope is positive
Changes in quantity supplied and changes in supply
Changes in supply
Caused by changes in the price of the commodity itself
point move
Changes in supply
Caused by changes in other factors
line movement
Factors affecting the supply of defense spending
International economic strength
International fiscal revenue
Country financial conditions
Equilibrium price
Meaning
Relatively static state
Equilibrium price determination
Qd=Qs
Change in equilibrium price
Supply remains unchanged, demand changes
Equilibrium price and equilibrium quantity move in the same direction as demand
Demand remains unchanged, supply changes
The equilibrium price and supply direction move in opposite directions, and the equilibrium quantity and supply direction move in the same direction.
Both supply and demand change
Same direction
The equilibrium price is uncertain, and the equilibrium quantity and demand move in the same direction.
reverse
The equilibrium price and demand move in the same direction, and the equilibrium quantity is uncertain
Highest price and lowest price
Maximum price (limit price)
Protect consumers, supply exceeds demand
Minimum Price (Support Price)
Protect producers, oversupply; government purchases excess products
Price elasticity of demand
Meaning
How much demand changes reflect price changes
Calculate
Arc elasticity (between two points)
Breakpoint formula
When the price is reduced
When the price increases
Midpoint formula
Point elasticity (a certain point)
Classification
Inelastic: 0
Elastic: 1
Unit elasticity: 1=ed
Perfect elasticity: ed=infinity
Completely inelastic: ed=0
Price elasticity of demand and sales revenue of manufacturers
Flexible
Profit from price reduction
Lack of elasticity
Profit from price increase
Unit elasticity
Regardless of price increases or decreases, sales revenue remains unchanged
Influencing factors
Substitutability of goods
Proportional
Product versatility
Proportional
Importance to consumers
Inversely proportional
Proportion of commodity consumption expenditure in total consumer budget expenditure
Proportional
The consumer under examination adjusts the quantity demanded
Generally speaking: long-term demand elasticity is large
Durable consumer goods: long-term demand elasticity is small
Cross elasticity of demand
eXY>0: Two goods are substitutes for each other
eXY<0: two goods are complementary goods to each other
eXY=0: There is no correlation between the two commodities
Income elasticity of demand
eM>0: normal product
0
eM>1, high-end goods or luxury goods
em<0: low-grade or inferior products
Price elasticity of supply
Meaning
Supply quantity change rate/price change rate
Calculate
Arc elasticity
Point elasticity
Classification
Inelastic: 0
Elastic: 1
Unit elasticity: es=1
Perfect elasticity: ex=infinity
Completely inelastic: ex=0
Comment
0 Comments
Next Page