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Questions tagged [supply-and-demand]

Supply and Demand is an economic model of price determination in a market. Demand refers to how much (quantity) of a product or service is desired by buyers. Supply represents how much the market can offer.

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Price Elasticity of Demand for Positive Price Increases

What does it mean when the price elasticity of demand %Qd/%P is greater than one? Typically I hear that it means the demand is elastic since if, say, the price decreases by 1% the demand for the ...
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Have automation and technological advance been shown to have a positive impact on society and the economy or a negative one?

My friends and I, 2 of which are computer science majors think it is worse because is humans can't work and thus afford necessities, how will they survive? The definition of automation: the use of ...
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What are Giffen Goods?

What exactly are Giffen goods and are they of purely theoretical interest or has there been empirical evidence of their existence?
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Which utility function yields a constant price elasticity of demand function?

How do I know which utility function I can use to find an isoelastic demand function, e.g., $x(p)=Ap^a$? And similarly, which cost function can I use to find an isoelastic supply function? Does it ...
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Simple model to predict oil prices

Back when Hugo Chavez was still alive (former leader of Venezuela), he said they made "simulations" to predict how much oil prices will increase if they retire the supply of oil they were giving to ...
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Why is AC = MC in the monopoly?

Using the Microeconomic Theory Basic Principles and Extensions, Nicholson, W. and Snyder, C., I've reached to the point where Monopoly and Imperfect Competition is discussed (Chapter 14 and 15 to be ...
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Will price increase as demand increase?

I know the law of demand which states that if price of a product increases then the demand will decrease In this, I think we assume that price is a function of demand. But I feel otherwise i.e. ...
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Why does quantity supplied increase with price in economics?

The Law of Supply is my worst enemy in economics because I could never truly understand it, and as a result, the stuff I learned after that was built on a weak foundation. The Law of Demand is totally ...
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Can marginal revenue be increasing?

As per my calculations, the derivative of the MR curve is given by: MR'(q)=2p'(q)+qp''(q), where p(q) is the inverse demand curve. Therefore,for a downward sloping demand curve, if the second ...
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Supply/Demand of Smuggling

I am attempting a (very) basic analysis of smuggling from one economy to the other (Venezuela to Colombia) - arising from price ceilings ceteris paribus. e1 are the equilibria without intervention (...
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Modelling Pay what you want

I have been trying to model a Pay What you Want scheme. Now, for a monopoly it is clear that monopoly will have more profit by setting monopoly pricing assuming all players are selfish. But consider a ...
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1answer
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relation between the demand function and the marginal utility function

Can one say that the demand curve equals the marginal utility function? I have one course where this is stated. However, the demand curve dan be derived from combining the utility function with the ...
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How price and quantity of ice cream sold changes when the price of yogurt reduces?

I am a newbie at economics and would appreciate help from the community. Question Use the model of supply and demand to explain how a fall in the price of frozen yogurt would affect the price of ...
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Why Law of Supply indicate direct relation between price and supply?

According to Wikipedia, the Law of Supply states that: an increase in price results in an increase in quantity supplied. However, if the market was overflowing with a particular good (meaning ...
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Determine the homogeneity of a demand function

If a demand function $X(P_X, P_y, I)$ depends only on prices and income. Is this function a homogeneous function?