3 ms·
Supply curves are very observable. They are in fact about the only concrete thing you can get in economics. The demand curve on the other hand? That thing is
by sumtechguy 3y ago
Supply curves are very observable. They are in fact about the only concrete thing you can get in economics. The demand curve on the other hand? That thing is borderline made up magic.
But the reality is the inputs need to be known to make the curves. Supply curve is 'easy' as you know what it takes to build X number of items. So you can make that curve easily. The hard part is the other curve. How do you know I can sell X of an item. Is there demand there? 'utility' 'happiness' and other things like that make up that curve. But how do you measure those inputs? If you have been around awhile you probably have a good idea where your curve is by seeing it in action, but the inputs for it you are usually guessing. But starting out? Not really. What really bakes someone's noodle is the supply curve can affect the demand curve.
You want to get as close to MR=MC as you can. But that is not always achievable. As you point out the curves move around. But that is on you as a business owner to make sure your prices are in line with your demand.