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The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply; if something is ava
by endoself 14y ago
The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply; if something is available for much less than the maximum price someone is willing to pay, then that just means that they get it for a lot less, it doesn't change how much they are willing to pay in principle.
(There are a few subtleties here, such as that willingness to pay should be measured in terms of opportunity costs rather than dollars, but all this stuff can be found in an economics textbook.)
- betterunix 14y ago"The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply" What the is maximum you willing to pay for breathable air? How much would you be willing to pay if you could not find free air everywhere you went? Demand is not "the maximum price people are willing to pay," it is "the willingness and ability to pay a given price."