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I know close to nothing about economics and was a bit confused by this statement: "The line sloping downwards represents demand. As quantity increases (bottom
by pedrosorio 5y ago
I know close to nothing about economics and was a bit confused by this statement:
"The line sloping downwards represents demand. As quantity increases (bottom axis), the price people are willing to pay also decreases."
This makes it sound like there is an "available demand quantity" that is the independent variable and a "price" that is the dependent variable. But it seems a lot more intuitive to say "demand increases (I want to buy more and more people are willing to buy) if a good is offered at a lower price", where price is the independent variable.
- vasco 5y agoNot sure why you're getting downvoted for asking a question, but hopefully this page helps: https://en.wikipedia.org/wiki/Economic_graph https://en.wikipedia.org/wiki/Economic_graph
- pedrosorio 5y agoIt wasn't the graph that confused me (I've seen a supply-demand graph before and understood the axes were "reversed" compared to most other disciplines), but the description in the post itself.
- the_pwner224 5y agoCorrect. Price is the independent variable, demand and supply are both dependent on price. But for some reason economists decided to put price on the Y axis. Confusing. However. The demand and supply curves (lines) are dependent on price. But the intersection of those lines determines the optimal price. In that sense, price is dependent on supply and demand. So 'price' the variable should be on the X axis since it's the independent variable which controls supply & demand. But 'the optimal price' is the dependent variable controlled by supply & demand, and so that should be on the Y axis.
- nsomani 5y agoYeah I agree, I typically think about quantity as a function of price