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Going back to econ 101 & supply/demand curves: Jevons describes the supply curve moving out, resulting in increased quantity Baumol describes the supply curve
by CGMthrowaway 1y ago
Going back to econ 101 & supply/demand curves:
Jevons describes the supply curve moving out, resulting in increased quantity
Baumol describes the supply curve moving back, resulting in higher prices
- huevosabio 1y agoYes, and in while Jevons is obvious why (efficiency changes the supply curve), Baumol is less apparent because the cause is more indirect.
- CGMthrowaway 1y agoIndirect only if you think opportunity cost is "hidden" (which it often is the way people prefer to look at things) Getting to Yes, BATNA, Etc. In an efficient market the price of Thing A is exactly equal to what you'd pay for your best alternative Thing B (assuming you can find an offer for your bid)