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I don’t know if you’ve even seen a supply and demand graph, but there is a price a supplier is willing to sell at, and a price the buyer is willing to pay. The
by simulate-me 4y ago
I don’t know if you’ve even seen a supply and demand graph, but there is a price a supplier is willing to sell at, and a price the buyer is willing to pay. The supplier’s price is based off of their costs. Saying the price is only determined by the buyer makes no sense.
- Clent 4y agoEconomists love their supply demand graph. This article is saying the graph isn't enough. This seems obvious on its face, reminds me a friction in physics, where you can ignore it until you cannot. But physics is not incapable of measuring the friction. The concern is if economists able to account their model's friction.
- doubled112 4y agoWe assume iced tea is sold in a spherical can in a vacuum in economics too?
- kbelder 4y agoAnd yet... points Arizona Ice tea. Unchanging price, changing costs. I think what everybody is missing is the 'tends' qualifier. Price tends to rise with increased demand; price tends to drop with increased supply. It's true, but simplified, and can be influenced by a near infinite amount of other factors, like most other behavioral laws.
- simulate-me 4y ago> Arizona Ice tea. Unchanging price, changing costs. This just means the demand curve is very price sensitive, but it doesn't mean the supply curve doesn't exist. There is an element of survivorship bias to all of this. Products on the market exist because there is a point the supply and demand curves intersect. It's totally that the price people are willing to pay for Arizona ice tea will be less than the cost to produce it, at which point Arizona ice tea will cease to exist.