0
$\begingroup$

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

$\endgroup$
2
$\begingroup$

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.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.