Is it possible ? if it's possible can someone give me a reference ? Thanks !


1 Answer 1


It is possible. Trivially if we have $Q^s=f(p)$ and $Q^d=g(p)$ and we plot this in a 3d-coordinate system with variables $p$, $Q$ and some other variable $x$ (which does not appear in our functions at all), then we can take a 'slice' for every $x$-value, and in fact every slice gives us the conventional 2d-depiction of this model.

We could of course take the standard supply-demand model and take some parameter as third variable, for example:

$$Q^s(p,t)=\max(0, p-t), \quad Q^d(p,t)=\max(0, 1-p)$$

Where $t$ is a unit tax imposed on the suppliers of the good in question. We can plot this in a 3d coordinate system with variables $Q,t,p$ and a red line showing equilibria:

As we would expect there is a positive relationship between equilibrium price and the level of the unit tax.


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