Microeconomics for Business Decisions Econ1001
商业决策的微观经济学 Econ1001

Workshop Three

Elasticity Concepts

Workshop Three Elasticity Concepts

Question One What is ‘elasticity’ ?
问题一：什么是“弹性”？

Define elasticity and why is the concept is so important for business decisions?
定义弹性，为什么这个概念对业务决策如此重要？

Elasticity is defined as how sensitive one variable is to the change in another. In microeconomics it is how much will quantity demanded or quantity supplied change in proportion to a change in another variable, typically price or income.
弹性被定义为一个变量对另一个变量变化的敏感程度。在微观经济学中，它是需求量或供应量与另一个变量（通常是价格或收入）的变化成比例的变化。

Relevancy of elasticity for business decisions:
弹性与业务决策的相关性：

Businesses (i.e. firms, corporations, government utilities, etc.) need to know how sensitive their customers’ demand is to a price change. If customers are very price sensitive (meaning a price increase will cause proportionally more decrease in quantity sold [ e.g. an increase in 5% of the firm’s products causes say a 10% decrease in sales]), then the firm needs to be very cautious about its pricing; for example it might be reluctant to pass on a rising cost of production to customers.
企业（即公司、公司、政府公用事业等）需要了解客户需求对价格变化的敏感程度。如果客户对价格非常敏感（这意味着价格上涨将导致销售数量按比例减少[例如，公司产品增加 5% 会导致销售额下降 10%]），那么公司需要非常谨慎地定价;例如，它可能不愿意将不断上升的生产成本转嫁给客户。

Businesses involved in producing and selling price elastic goods and services are often more vulnerable to recessions compared with those involved with less price elastic goods and services.
与价格弹性较低的商品和服务相比，参与生产和销售价格弹性商品和服务的企业往往更容易受到经济衰退的影响。

Provide some examples of products where consumers are generally price sensitive (e.g. products where demand is elastic) and other examples where consumers are generally less price sensitive (e.g. products where demand is inelastic).
举例说明消费者通常对价格敏感的产品（例如需求有弹性的产品）和消费者对价格通常不太敏感的其他例子（例如需求没有弹性的产品）。

Elastic demand: A price rise will result in a proportionally more decrease in the quantity demanded for that product.
弹性需求：价格上涨将导致该产品的需求量按比例减少。
Examples: restaurant meals, overseas holidays (for the average person), etc.
例如：餐厅用餐、海外度假（普通人）等。

Inelastic: A price rise will result in a proportionally less decrease in the quantity demanded for that product.
非弹性：价格上涨将导致该产品需求量的减少按比例减少。
Examples: petrol, electricity (at least in short to medium term); medical procedures (because often a necessity and no substitute), etc.
例如：汽油、电力（至少在中短期内）;医疗程序（因为通常是必需品，没有替代品）等。

Question Two Price elasticity calculations
问题二：价格弹性计算

Calculate price elasticity and provide interpretations of the elasticity results (i.e. what business decisions can be made, given the elasticity number [called a coefficient])
计算价格弹性并提供弹性结果的解释（即，在给定弹性数 [称为系数] 的情况下可以做出哪些业务决策）.

The price of oranges falls by 10% and the quantity of oranges demanded increases from 500 to 600. Use the percentage change method (%∆Q / %∆P)
橙子价格下降了10%，橙子需求量从500个增加到600个。使用百分比变化法 （%∆Q / %∆P）

Learning note: [ B – A / A ] x 100 is the percentage change. For example, if quantity demanded was 500 and then increases to 600, this is a 20% increase.
学习说明：[ B – A / A ] x 100 是百分比变化。例如，如果需求量为 500，然后增加到 600，则增加 20%。

[ 600 - 500 / 500] x 100 = [100 /500] x 100 = 0.2 x 100 = 20%

Take absolute value….=2
取绝对值....=2

If absolute value > 1…….product is price elastic
如果绝对值> 1....... 产品是价格弹性的

If absolute value < 1…….product is price inelastic
如果绝对值< 1....... 产品是无弹性的

Therefore product is price elastic.
因此，产品具有价格弹性。

Question Three Income elasticity calculations
问题三：收入弹性计算

Calculate Income elasticity when consumers’ incomes increase by 5% and the quantity of oranges demanded increases from 500 to 515.
当消费者收入增加 5% 且橙子需求量从 500 增加到 515 时，计算收入弹性。

If the income elasticity of demand for wine is 2, then a 5% increase in consumers' incomes will lead to a _______ % increase in quantity demanded
如果葡萄酒需求的收入弹性为2，那么消费者收入每增加5%，需求量就会增加_______%

Ey = %change Q / % change income
+2 = ? / + 5%
? = +10%
Therefore a 10% increase in quantity demanded.
因此，需求量增加了 10%。

Question Four Cross-price elasticity
问题四：交叉价格弹性

Calculate cross-price elasticity when the price of apples falls from $1 to $0.80 (80 cents) and the quantity of oranges demanded falls from 500 to 450. Interpret the result: are apples and oranges substitutes or complements in this case?
当苹果价格从 1 美元下降到 0.80 美元（80 美分）并且橙子需求量从 500 下降到 450 时，计算交叉价格弹性。解释结果：在这种情况下，苹果和橙子是替代品还是补充？

The price of butter increases from a $10 to $12.50 a kilogram and the demand for bread falls by 20%. Calculate cross-price elasticity. Interpret the result: are butter and bread substitutes or complements in this example?
黄油的价格从每公斤10美元上涨到12.50美元，对面包的需求下降了20%。计算交叉价格弹性。解释结果：在这个例子中，黄油和面包是替代品还是补充？

Question Five

A local cinema reduces its ticket price from $10 to $8. The quantity demanded of tickets soon increases from 1000 to 1400 tickets per week. What is the price elasticity of demand? Use the percentage change method (%∆Q / %∆P). Note for price elasticity the absolute value is taken.
当地一家电影院将票价从 10 美元降至 8 美元。门票需求量很快从每周 1000 张增加到 1400 张。需求的价格弹性是多少？使用百分比变化法 （%∆Q / %∆P）。请注意，对于价格弹性，取绝对值。

Percentage method:

+40%/ -20% = -2
Which is interpreted as Ed = 2
解释为 Ed = 2

In the example above, explain whether the cinema’s total revenue will increase or decrease as a result of the ticket price decrease. Briefly explain why will it increase or decrease
在上面的例子中，解释电影院的总收入是会因票价下降而增加还是减少。简要说明为什么它会增加或减少.

The total revenue (P x Q) will increase.

Explanation: Because it is elastic (> 1) then the price decrease will cause quantity demanded to increase by proportionally more than the price decrease.
解释：因为它是弹性的（>1），那么价格下降将导致需求量按比例增加，而不是价格下降。

Could also use the numbers given to demonstrate:
也可以使用给出的数字来证明：
Total Revenue before price decrease: $10 x 1000 = $10, 000.

Total Revenue after price decrease: $8 x 1400 = $11, 200. (So an increase in TR of $1,200)
降价后的总收入：8 美元 x 1400 = 11， 200 美元。（因此 TR 增加了 1,200 美元）

Question Six

The Vice Chancellor of a university is concerned about increasing costs, and decides to raise tuition fees in an attempt to increase university revenue. Briefly explain (i.e. 2 or 3 sentences) whether you think this move will accomplish the Vice Chancellor’s objective. (Hint: what is the relationship b/w elasticity and total revenue?)
一所大学的副校长担心成本增加，决定提高学费，试图增加大学收入简要说明（即 2 或 3 句话）你是否认为此举会实现副校长的目标。（提示：黑白弹性和总收入有什么关系？

Depends on the price elasticity of fees.
取决于费用的价格弹性。

For a prestigious institution (e.g. Oxford, Harvard, etc.) students may not be that price sensitive so the VC’s strategy is correct in this case.
对于一所著名的学府（如牛津大学、哈佛大学等），学生可能对价格不那么敏感，所以在这种情况下，VC的策略是正确的。

But for an average university that is not in the top league and is facing fierce global competition, or a university (e.g. in a large city) with nearby competing institutions that do not raise their fees, then students may be much more price-sensitive. Thus the strategy of raising fees could actually decrease revenue because there might be a large decrease in quantity demanded.
但是，对于一所不在顶级联赛中且面临激烈的全球竞争的普通大学，或者一所大学（例如在大城市）附近有竞争机构，而这些机构不提高学费，那么学生可能对价格更加敏感。因此，提高费用的策略实际上可能会减少收入，因为需求量可能会大幅减少。

End of Workshop Set Three