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> It’s basic aggregate supply and demand. Okay, so then we have absolutely no idea in which way the demand curve will curve then. If the demand curve can be an
by ianleeclark 6y ago
> It’s basic aggregate supply and demand.
Okay, so then we have absolutely no idea in which way the demand curve will curve then. If the demand curve can be any polynomial, then we have no clue if this will happen or not.
- zumachase 6y agoWhat? Nothing I said has anything to do with the demand curve. This is all supply side. We hold the demand curve constant for any such analysis. But it’s irrelevant anyway: a basic tenet of economics is that people are, in aggregate, utility maximizers. So yes, we do have an idea of some fundamental properties of the demand curve and it cannot simply be any polynomial.
- ianleeclark 6y ago> We hold the demand curve constant for any such analysis. And this is the portion that I'm critiquing. You're holding it as a constant curve sloping downwards. > So yes, we do have an idea of some fundamental properties of the demand curve Okay, sure, it relies on there being people who have demand for some commodity. > it cannot simply be any polynomial "Any polynomial" might be overselling it, but we can't assume it's sloping downwards.