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Wage theories

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.. ECON 563Managerial Economics Module 2: Market Equilibrium, Demand and Supply Model Copyright 2017 Montclair State University .. ECON 563Managerial Economics Module 2a: Brief Overview Learning Objectives (1) Explain the laws of demand and supply, and identify factors that cause shift in demand and supply. (2) Define and calculate consumer surplus and producer surplus. (3) Explain price determination in a competitivemarket, and show how equilibrium changes in response to changes in determinants of demand and supply. Learning Objectives (4) Explain and illustrate how excise taxes, ad valorem taxes, price floors, and price ceilings impact the functioning of a market. (5) Apply supply and demand analysis as a qualitative fore- casting tool to see the big picture in competitive mar- kets. .. ECON 563Managerial Economics Module 2b: Demand Demand Market demand curve • Describes the relationship between the total quantity and price per unit of a good all consumers are willing and able to purchase, holding other variables constant. Law of demand • The quantity of a good consumers are willing and able to purchase increases (decreases) as the price falls (rises). • Price and quantity demanded are inversely related. Price $/lb $6 $4 $2 Quantity (lbs)742 D 0 Market demand curve Movement Along Demand Curve Change in quantity demanded • Changing only price leads to changes in quantity demanded. • Graphically represented by a movement along a given demand curve, holding other factors that impact demand constant. Shift in Demand Curve Shift in demand • Changing factors other than price lead to changes in demand. • Graphically represented by a shift of the entire demand curve. Price Quantity Shift to the right Shift to the left Changes in Demand Demand Shifters Income • Normal good • Inferior good Prices of related goods • Substitute goods • Complement goods Advertising and consumer tastes • Informative advertising • Persuasive advertising Population, Consumer expectations, Other factors Price Quantity D D′ 0 Figure : Advertising and Increase in Market Demand Curve .. ECON 563Managerial Economics Module 2c: Demand Function The Demand Function The demand function for good X (say, apples) is a mathe- matical representation describing how many units (pounds, lbs) will be purchased at different prices for X ($ per lb), the price of a related good Y (say, orange), income and other factors that affect the demand for good X. The Linear Demand Function One simple, but useful, representation of a demand function is the linear demand function. QdX = α0 + αXPX + αY PY + αMM + αHH where QdX is the number of units of good X demanded ; PX is the price of good X ; PY is the price of a related good Y ; M is income ; and H is the value of any other variable affecting demand. Understanding the Linear Demand Function The signs and magnitude of the α coefficients determine the impact of e ...

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Falcon Invoice Discounting: Empowering Your Business Growth

Falcon Invoice Discounting: Empowering Your Business Growth

Falcon Invoice Discounting: Empowering Your Business Growth

Uneak White's Personal Brand Exploration Presentation

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0 Wage Theories

1. Wage theories

2.

3.

4.

5.

6.

7.

8. Shift in demand for labour D1 D2 MRP1 MRP2 MRP D Increase Decrease demand Demand for labour unit Productivity Y X O

9. Wage determination under competitive condition DL D SL S W AW=MW W O Y X X Y O (Labour supply curve ) (Wage line) AC=MC of labour N E Units Of Labour Units Of Labour Wage Rate Industry Market Firm

10. Relation between Wage and Managerial Productivity X Y Y X 0 0

12. Y Y X X 0 0

13.