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4
2.8
3.6
8
2.4
r!1
3.2
"sellers market"
1.8
2.6
Ps
6
2.2
P
2
4
1.6
0"r"1
1.4
1.2
"buyers' market"
1
0.8
0.6
4
0.4
6
K
8
Ks
Figure 8.1 Seller's asking price, Ps, as a function of market power, r, and
the seller's average cost per unit, Ks , m = 1
1.2
B=12
B=6
B=18
1.1
"equilibrium price"
1.0
Ps
0.9
G=18
0.8
G=12
G=6
5
10
15
20
Bs , GBs
Figure 8.2 Seller's asking price, Ps, as a function of the number of buyers, Bs, constituing
"demand," and the number of goods for sale by all sellers, GS,B, constituting "supply,"
with b = g , Ks = 1, N = 5 and m = 1
1
2
A
Price, P
1.5
#
$
1.5
3
"sellers' market"
2
1
y
0.5
0.5
B
"buyers' market"
1
2
x
3
4
log Bs + N
log GBs + N
Figure 8.3 Ps as a function of b/g and (logBs + N)/(logGBs +N), forBs and GBs, » N,
Ks = 1, and m = 0.7
3.0
40
2.0
6.0
1.0
20
0.5
Outlay, Yb
0
contours of V
0
-20
y
-6.0
- 1.0
-2
-40
20
x
40
60
80
Income, Wb
Figure 8.4 Buyer's b's outlay, Yb, as a function of his or her income, Wb , and of his or her
valuation of the good, Vb.
V max= 6
value range
P4
Consumer-buyer's
offering price, Pb
P3
P2
price range
P1
income range
W1
W2
Income, Wb
Figure 8.5 Potential buyers' offering price range versus income range, for a good whose value
ranges between 0.8 and 1.4 (Kb /Pb « 1)
"superior goods"
Vmax= 6
"normal goods"
Consumer-buyer's
offering price, Pb
"inferior goods"
Income, W b
Figure 8.6 Buyer's offering price, Pb, vs. Income, Wb for different values, Vb and kinds of good,
"inferior," "normal," and "superior" (Kb /Pb = a constant < 1)
4
2
6
8
1
6
10
16
8
14
10
12
22
26
20
14
30
2
24
0.8
P ( × 100)
0.6
1.5
2
12
rs
f(Vb)
seller makes above-normal profit
K s ( × 100)
0.4
4
fv
0.5
0.2
10
20
Wb ( × 100)
incom
seller takes a loss
1
30
Figure 8.7 Plotting the field of transaction prices, {P}, combining the buyer's and seller's
perspective (Kb = 0). Sellers make an extra-normal profit above the r = 1 line.