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How would the demand curve avoid expressing anything the value the buyer receives (or at least perceives) from their transaction?
by sokoloff 1y ago
How would the demand curve avoid expressing anything the value the buyer receives (or at least perceives) from their transaction?
- somenameforme 1y agoIt doesn't. It simply makes clear that the reason is not 'value', as somebody might interpret it, but scarcity. If there were 100 million competent software engineers in the US, the value they add to companies wouldn't change, but their labor costs would - quite dramatically. In such a scenario coding and flipping burgers would offer relatively comparable wages. Supply:demand makes the reason for this change completely clear, vague notions of poorly (and often circularly) defined 'value' do not.
- sokoloff 1y agoScarcity is reflected in the supply curve. Value in the demand curve. Where they intersect gives the market price.