麻省理工微观经济学原理lec17

12 Supply Restrictions 2curve and the line of price P2,thusΔP S= A+ B+ D.Government buys quantity Q3−Q2at price P2; the cost equals the area of the rectangularΔG= −(B+ D+ E).The deadweight loss to the society isDW L= −(B+ E).2 Supply RestrictionsGovernment restricts quantity supplied to be less than Q1(see Figure 2). Theoriginal consumer surplus equals the area between the demand curve and the line of price P0; after the supply restriction, it equals the area between the demand curve and the line of price P1,thusΔCS= −(A+ B).The original producer surplus equals the area between the supply curve and the line of price P0; after the supply restriction, it equals the area of the trapezoid, with the supply curve,the line of price P1,the line of quantity Q1,and the price axis as its sides, thusΔP S= A−C.Cite as:Chia-Hui Chen,course materials for14.01Principles of Microeconomics,Fall2007.MIT OpenCourseWare(),Massachusetts Institute of Technology.Downloaded on[DD MonthZero Quota 3Thus,the deadweight loss isDW L= −(B+ C).Example government measures include import quota and tariff, which benefit domestic producers but hurt consumers.2.1 Zero QuotaS D is the domestic supply, and D D is the domestic demand. If no import is allowed,the domestic price is P0. Without restriction on import, the domestic price would be the same as the world price P W, which is lower than P D(see Figure3). Without import quota restriction, consumer surplus equals the areaFigure3: Zero Quota.between the domestic demand curve and the line of price P W; if the quota is zero,it equals the area between the domestic demand curve and the line of price P0,thusΔCS= −(A+ B+ C).Without quota restriction,producer surplus equals the area between the domes­tic supply curve and the line of price P W;if the quota is zero,it equals the area between the domestic supply curve and the line of price P0,thusΔP S= A.The deadweight loss isDW L= B+ C.2.2 Non-Zero QuotaGiven the same S D, D D, and P W, now suppose the government sets non-zero quota k.The domestic price P1is where the difference between domestic demand Cite as:Chia-Hui Chen,course materials for14.01Principles of Microeconomics,Fall2007.MIT OpenCourseWare(),Massachusetts Institute of Technology.Downloaded on[DD MonthCite as: Chia-Hui Chen, course materials for 14.01 Principles of Microeconomics, Fall 2007. MITOpenCourseWare (), Massachusetts Institute of Technology. Downloaded on [DD Month (Q D 1) and domestic supply (Q S 1)is k (see Figure 4). Likewise, the change of consumer surplusΔCS = −(A + B + C + D );and the change of domestic producer surplusΔP S D = A.The net domestic loss equals−(ΔCS +ΔP S )= B + C + D.The foreign producer surplus increases by excess profits, which equal the area of rectangular CΔP S F = C.The total deadweight loss isDW L = B + D.The domestic loss isDomestic Loss = B + C + D.2.3 Import TariffGovernment imposes a tariff P 1 − P W on each unit imported (see Figure 5). The change of consumer surplus and domestic producer surplus are5ΔCS= −(A+ B+ C+ D)andΔP S D= A,respectively. Foreign producers gain nothing,that is to sayΔP S F=0,because C becomes the revenue of governmentΔG= C.The deadweight loss isDW L= B+ D,which equals to the domestic loss.3 Tax and SubsidyAssume that government imposes a $1 tax on each cigarette unit. Given the market price P,if the tax is paid by•producers,then buyers pay P and producers get P−1;•consumers,then buyers pay P+1 and producers get P.Cite as:Chia-Hui Chen,course materials for14.01Principles of Microeconomics,Fall2007.MIT OpenCourseWare(),Massachusetts Institute of Technology.Downloaded on[DD Month6 3 Tax and Subsidy Therefore, the price paid by buyers and the price received by producers always have a difference of 1(see Figure 6). Let P B be the buyer’s price and P S be the seller’s price.P D − P S =1.In figure 6, we put buyer’s price on the y axis. Therefore, with the tax, the ′supply curve moves from S to S . The equilibrium buyer’s price is P D , and the equilibrium seller’s price is P S . Thus, the consumer surplus and producer0 1 2 3 4 56 7 8 9 10 0 0.511.522.533.544.55P D A B C D S’ P 0 P D P S buyer’s price S Q 0Q 1 Q surplus both decrease:ΔCS = −(A + B ),ΔP S = −(C + D ).Government revenueΔG = A + C.So, the deadweight loss isDW L = B + D.Cite as: Chia-Hui Chen, course materials for 14.01 Principles of Microeconomics, Fall 2007. MITOpenCourseWare (), Massachusetts Institute of Technology. Downloaded on [DD Month。