Alfred Marshall - History of Economic Thought - Lecture Slides, Slides of Economics

Download Alfred Marshall - History of Economic Thought - Lecture Slides and more Slides Economics in PDF only on Docsity! Alfred Marshall (1842-1924) docsity.com Alfred Marshall (1842-1924) • Principles of Economics, 1890 docsity.com Offer Curve: Country A Quantity Imported of Good Y Quantity Exported of Good Y Quantity Exported of Good X Quantity Imported of Good X No trade No-trade terms of trade docsity.com Offer Curve: Country B Quantity Imported of Good Y Quantity Exported of Good Y Quantity Exported of Good X Quantity Imported of Good X docsity.com Offer Curve: Country B Quantity Imported of Good Y Quantity Exported of Good Y Quantity Imported of Good X Quantity Exported of Good X docsity.com Elasticity of Demand • Elasticity of Demand formula, 1882 docsity.com Elasticity of Supply • Supply elasticity depends on time available to producers to respond to a price change – Market period: perfectly inelastic supply, price is determined entirely by demand in the case of perishable goods and by expected future prices in the case of durable goods. – Short run: rising supply curve, price is determined by both supply and demand, usage levels of some resources are fixed – Long run: usage levels of all resources are variable, supply could be a falling curve – Very long period: changes in knowledge, population and capital cause long run prices to change gradually docsity.com Economies of Scale • Internal and external economies of scale – Internal economies: as a firm expands production, its per-unit costs decline – External economies: as an industry expands production, the per-unit costs of production decline for every firm • Possibility of a falling supply curve for the industry – As an industry expands, per-unit costs may fall as a result of external economies. Therefore, prices may fall. docsity.com