Margina|ism(边际主义) and marshalls Model of Supply and demand Ricardo' s model was unable to explain the fall in the relative prices of good during the nineteenth century so a more general model was needed Economists argued the willingness of people to pay for a good will decline as they have more of it Chapter 1
Chapter 1 35 Marginalism（边际主义） and Marshall’s Model of Supply and Demand Ricardo’s model was unable to explain the fall in the relative prices of good during the nineteenth century so a more general model was needed Economists argued the willingness of people to pay for a good will decline as they have more of it
Marginalism and Marshall's Model of Supply and Demand People will be willing to consume more of a good only if the price is lower The focus of the model was on the value of the last, or marginal unit purchased Alfred Marshall (1842-1924)showed how the forces of demand and supply simultaneous/(同时) determined price Chapter 1 36
Chapter 1 36 Marginalism and Marshall’s Model of Supply and Demand People will be willing to consume more of a good only if the price is lower The focus of the model was on the value of the last, or marginal, unit purchased Alfred Marshall (1842-1924) showed how the forces of demand and supply simultaneously（同时） determined price
FIGURE 13: The marshall Supply-Demand Cross Price supply Demand Quantity per week Chapter 1 37
Chapter 1 37 FIGURE 1.3: The Marshall Supply-Demand Cross Deman d Supply Price 0 Quantity per week
Marginalism and Marshall's Model of Supply and Demand The demand curve shows the amount people want to buy at each price and is negatively sloped reflecting the marginalism principle The upward sloping supply curve reflects the idea of increasing cost of making one more unit of a good as total production Increases Chapter 1
Chapter 1 38 Marginalism and Marshall’s Model of Supply and Demand The demand curve shows the amount people want to buy at each price and is negatively sloped reflecting the marginalism principle The upward sloping supply curve reflects the idea of increasing cost of making one more unit of a good as total production increases
Marginalism and Marshalls Model of Supply and Demand Supply reflects increasing marginal costs and demand reflects decreasing marginal usefulness Chapter 1 39
Chapter 1 39 Marginalism and Marshall’s Model of Supply and Demand Supply reflects increasing marginal costs and demand reflects decreasing marginal usefulness