Lecture

Market Equilibrium: Electric Vehicle Demand and Supply Analysis

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In course

ENV-471: Environmental economics

Introduction to economic analysis applied to environmental issues: all the necessary basic concepts, including cost-benefit analysis, for environmental policy making and its instruments (examples: climate, waste, mobility). Introduction to financial calcul ...

Description

This lecture discusses the principles of market equilibrium, focusing on the demand and supply for electric vehicles (EVs). It begins by defining market equilibrium as the point where the quantity demanded equals the quantity supplied. The instructor presents the demand and supply equations for a normal good, illustrating how to determine market outcomes at various price points. The discussion includes the implications of price limits and shifts in demand due to government incentives. The instructor introduces the concept of the 'green paradox,' explaining how encouraging the purchase of EVs can inadvertently lead to increased demand for internal combustion engine (ICE) vehicles. The lecture further explores the dynamics between two buyer groups: those motivated to buy EVs and those less inclined. The impact of subsidies on demand functions is analyzed, highlighting how they can shift willingness to pay and affect market equilibrium. The instructor concludes by discussing the complexities of targeting subsidies effectively and the potential for crowding out buyers in the EV market.

Instructor

Philippe Thalmann

Philippe Thalmann was born in Lausanne in 1963. He graduated in Economics from the University of Lausanne in 1984, where he earned a postgraduate diploma in Economics in 1986. Mr. Thalmann entered the doctoral program in Economics of Harvard University (Cambridge, U.S.A.) in 1986, which he completed with a Ph.D. in 1990. His dissertation is entitled: "Essays in the Economics of Government Revenues and Spending". Returning to Switzerland, he was hired as an assistant professor first at the University of Geneva (teachings in Public Economics), then at the University of Lausanne (teachings in Econometrics and Introductory Economics). Since 1994, Mr. Thalmann is associate professor of Economics as the Swiss Federal Institute of Technology at Lausanne.

Official source

Ontological neighbourhood

Economics

Macroeconomics: Markets

Microeconomics: Supply and demand

Related concepts (29)

Economic equilibrium

In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers.

Competitive equilibrium

Competitive equilibrium (also called: Walrasian equilibrium) is a concept of economic equilibrium, introduced by Kenneth Arrow and Gérard Debreu in 1951, appropriate for the analysis of commodity markets with flexible prices and many traders, and serving as the benchmark of efficiency in economic analysis. It relies crucially on the assumption of a competitive environment where each trader decides upon a quantity that is so small compared to the total quantity traded in the market that their individual transactions have no influence on the prices.

General equilibrium theory

In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts with the theory of partial equilibrium, which analyzes a specific part of an economy while its other factors are held constant.

Many-minds interpretation

The many-minds interpretation of quantum mechanics extends the many-worlds interpretation by proposing that the distinction between worlds should be made at the level of the mind of an individual observer. The concept was first introduced in 1970 by H. Dieter Zeh as a variant of the Hugh Everett interpretation in connection with quantum decoherence, and later (in 1981) explicitly called a many or multi-consciousness interpretation. The name many-minds interpretation was first used by David Albert and Barry Loewer in 1988.

Many-worlds interpretation

The many-worlds interpretation (MWI) is an interpretation of quantum mechanics that asserts that the universal wavefunction is objectively real, and that there is no wave function collapse. This implies that all possible outcomes of quantum measurements are physically realized in some "world" or universe. In contrast to some other interpretations, such as the Copenhagen interpretation, the evolution of reality as a whole in MWI is rigidly deterministic and local.

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