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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Why offer curves of a power plant are stepwise increasing?

I was wondering why the supply curve of a power plant in the auction for the Day-Ahead Market is stepwise increasing and not a continuous function with first and second derivative strictly positive. I ...
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Are all market demands residual demands to some extent?

I’ve been thinking about how the introduction of a new product, say a new substitute, impacts market demand. Intuitively I know that it would decrease demand and increase elasticity. I am curious ...
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Why doesn't Nintendo fire up the old factories and re-produce *exact* copies of many of their most popular games, controllers and consoles?

Let's suppose that Nintendo announce tomorrow that they are going to create exact re-releases of the American and European NES, SNES and Nintendo 64 consoles, exactly the same as when they were ...
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Solving for profit function $\pi (w,p)$ given the output of production function $f(z) = \sqrt{2z_1 + 3z_2}$

Solving for profit function $\pi (w,p)$ given the output production function $f(z) = \sqrt{2z_1 + 3z_2}$. I approached this problem by trying to solve the $p\nabla f(z) = w$. This is derived from ...
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Nash in demand functions!

I am searching for some types of games that are played in linear demand functions. Altough I hear that there is a vast literatrure for games that are played in the intercept or the slope of the demand ...
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How to find Aggregate Supply? [closed]

If you have multiple aggregate supply curves in a market, then how would you find the total aggregate supply?
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Question on estimating elasticity and cross elasticity with log-log regression model

For a regression model: Y = B0 + B1.X + B2.X2 + U, B1 and B2 is the marginal effect on ...
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Can demand side restrictions explain the productivity paradox (Solow paradox)?

Productivity paradox https://en.wikipedia.org/wiki/Productivity_paradox is the name for the slow productivity growth (i.e. slow GDP growth) of the developed economies despite the robotics, AI, ...
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What is the best way to estimate a demand curve?

I did a linear regression on quantity sold and price for a good and simply the coefficients don't make any sense. number of observations = 16 Demand=1868 -14*P Suply=0 +45*P So p*= 1421.778 and Q*= ...
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How would a global Robin Hood deed affect the economy? [closed]

In one fiction series about a dystopian world, a small group of wealthy criminals owned a large fraction of the world's cash, which was on their bank accounts in a single offshore bank. In the happy ...
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Interpreting the q-intercept of the demand curve

Given a demand curve for a particular commodity, which I'll interpret as a function $p(q)$, the $p$-intercept can be interpreted as the choke price, i.e. the lowest price at which quantity demanded is ...
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In demand and supply chart, why is it assumed that import will only happen if domestic suppliers are unable to supply?

First Review What I do understand, The demand and supply chart shows once imports are allowed... Tariff is added on imports resulting in loss of consumer surplus and increase in supplier surplus. I ...
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Confusion over shut-down point

In my textbook, the shutdown point is defined as the intersection between the average variable costs curve and the marginal costs curve. Suppose Company A has total costs function $TC(q_A)=\frac{1}{2}...
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Microeconomics undergraduate ELASTICITY help (differentiating log-linear demand curve) [closed]

How do you show that the price elasticity of demand is a constant if the demand function is log-linear? To show this, how do you differentiate the log-linear demand curve to determine dQ/dp, and ...
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Effects of Eliminating Government Controls on Supply (organ donation)

I was having a discussion with somebody about organ transplants. I gave the free market pov that allowing the sale of organs would greatly increase the supply, and the all-in price would come down ...
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Theories about how lack of supply can feed into lack of demand

Are there any economic theories supporting the possibility that lack of economic supply can result in a reduced economic demand? As an example, let's say a product exists, an electronic product let's ...
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Economics of exclusive supercars with limited number of items sold

I understand that rarity increases price, and that maximum profit may not be to sell every car you can but still the production of supercars looks weird to me. T.50 production will be 100. Allegedly ...
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Supply & Demand Modeling in Trucking/Freight

I have a dataset containing weight of freight, spend, mileage, and revenue per mile and I am trying to see if I can roughly create supply and demand curves from this data. I have multiples weight by ...
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Increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets w/ 2 separate buyers)

Would an increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets with 2 separate buyers) Note: I'm going to be mainly focused on the ...
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Why don't suppliers increase price after a positive demand shock?

Forgive me, I am new to economics. Suppose there's a demand shock in the pork market and D1 shifts to D2. Why not keep quantity supplied fixed at 220 and then raise prices to $3.70, instead of moving ...
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Why doesn't the San Francisco Bay Area have two-story houses?

The San Francisco Bay Area is an interesting place. Housing prices are through the roof (hehe) and increasing by an average of 5-20% per year for the past 20 years. This is largely driven by an ...
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Increased production costs associated with increased output produced? Why do firms have prices increase with the SRAS or Supply Curve?

In my textbook, it said (this is for SRAS and AD, but I'm also going to apply this a bit fo microeconomics.. sorry for mixing, but my question applies in both ways, I believe) "The average price ...
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Deadweight Loss and Excise Taxes

I am currently reading through the 5th Edition of Economics, by Paul Krugman and Robin Wells. Right now I am learning about excise taxes and how their different aspects (government revenue, deadweight ...
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Would Pilots and Air travel be considered complementary?

Now, my economics teacher and I have a disagreement. According to theory, as the price of air travel (airline tickets) increases, the demand for pilots will decrease as well because fewer people will ...
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Analytical approach to estimate equilibrium price for Real Estate Property

I am looking to calculate the equilibrium price, i.e an optimal price that I can set without affecting demand and maximize revenue. I've gathered historical data: occupancy rates, asking rents for ...
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What is supply-side of economics?

I've got a question for economics that I need help with, here is the question: "What is meant by the supply side of economics? Define the term ‘supply’ in the context of economics and explain the ...
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Interest rate determination in the real world

I have just learnt about the demand and supply framework for money and how the equilibrium interest rate in an economy can be determined. In theory, based on that framework, an increase in nominal ...
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simple aggregate demand GDP question

Explain whether aggregate demand responds more, less, or in the same way to changes in autonomous consumption when taxes depend or do not depend on GDP. I think the answer is more. As in my ...
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Using ML to estimate demand function

Say, I am looking to estimate the demand curve for rental of a real estate property. The demand varies depending on time of the year, location, economic and demographic variables. I'd like to ...
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Can a rescue package be considered as a subsidy to the industry?

In the BBC article, France announces €8bn rescue plan for car industry, it is mentioned that the car industry will be given a rescue package to avoid unemployment. Would this be considered as a ...
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What is the difference between the demand schedule and the demand curve?

What is the difference between the demand schedule and the demand curve that a monopolist or monopsonist has? Could someone provide details for both cases or even some paradigm or a graph. I can not ...
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Price Changes in Factor and Product Markets

I think something is wrong in my reasoning, and I can't really find out what it is Lets say the supply of labor decreases in a market. That would mean that the wage rate would increase in that market....
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Why did coronavirus cause a food shortage?

The argument I have seen is that since restaurants closed, demand for food is down. I understand how demand being suddenly lower could disrupt supply. What I don't understand is why demand is down. ...
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Demand-side effects meaning

I found the term of demand-side effects in the abstract of the following paper: journals-sagepub-com/ DOI/abs/10.1177/0974930619872083 . What does that mean? Can you explain it to me please? I need ...
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Is this a violation of the law of demand? [closed]

Beach resorts typically raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand? If so, why? If not, how would you be able ...
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How do you calculate the price of a good or service adjusted for scarcity?

For example, Widget A is worth \$100 when there are 50 of them available in the market, but the price goes up to $110 when there are only 40 of them left. Widget B is worth \$100 when there are 50 ...
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Why is there a demand for stocks? [duplicate]

The obvious answer is of course that people want to make a profit via either capital gains or dividends. Dividend stocks are easy to wrap my head around. As part owner of a company, an investor would ...
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Can the demand curve be a rectangular hyperbola, but $E_D \neq 1$? [closed]

So, I am given the next table: I am asked to find $Q_D$. So the prerequisites to find $Q_D$ is that the price must change, and all other factors of demand must be steady. So, I can find the $Q_D$ ...
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Profit maximization, when $MC = P$, in a simple supply table and curve

Our economics school book states that the profits of a company are maximized when MC = P. However, I am having some trouble wrapping my head around that. For example, I have the following exercise: ...
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Why would oil suppliers choose a lower priced contract?

The West Texas Intermediate (WTI) futures contract has ranged from \$6 to \$20 in the last 48 hours. The May Shanghai International futures contract is 205 Yuan (CNY). At 7 CNY per USD, that comes ...
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Industries that thrive in crisis like COVID 19

I am aware that some industries thrive during crisis times like COVID 19...Food supplies, medical, counselling, funeral services, liquor etc. Are there any other industries that may do well during ...
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Does elasticity vary along the Demand/Supply curve or is it a summary statistic of a curve?

I know that the Demand curve has elastic and inelastic regions but when we say horizontal demand/supply curves are elastic or vertical curves are inelastic, in that case, does the elasticity still ...
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“Consumption lowers investment” mankiw explanation

I am teaching myself macroeconomics and I am stuck on this reading Mankiw: Because the economy’s output is fixed by the factors of production and the level of government purchases is fixed by the ...
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$a\geq 0$, $x\succsim y$ implies $x+a\succsim y+a$ so the preference is linear?

$\succsim$ is a continuous and local non-satiate weak order. $x,y,a$ are vectors in $\mathbb R^n$ We say $a\geq0$ if all directions of the vector $a$ is greater or equal to zero. We want to prove (...
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Won’t paying wages to temporarily unemployed due to Coronavirus result in inflation?

UK government promises to pay 80% of wages for people unemployed due to coronavirus. I am not economist, so I am probably missing something, but shouldn’t paying wages to unemployed due to coronavirus ...
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What are the consequences of price-capping non-perishables undergoing temporary demand-spikes?

Due to the recent coronavirus outbreak (2020 for future readers), many consumers worldwide are overstocking on non-perishable products like toilet papers and hand sanitizers, in order to avoid ...
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Why would the price of goods rise up after increased consumption due to the outbreak?

On the wake of the COVID-19 outbreak, consumption of some goods will increase. But, my question is why so? My understanding is that, since aggregate demand for these goods has increased, supply can'...
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Few questions regarding treasury bills

I have a few questions regarding repurchase markets. My professor told our class today that Repo (Repurchase) Markets are essentally markets where the government lends corporates a very cheap rate of ...
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What if the government impose both price control and supply restriction on the market?

Due to the virus outbreak, there is a surge in demand for mask and hand sanitizes. To prevent price hiking government impose a price ceiling on the products, however consumers are behaving irrational (...
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(AD-AS model) How is it possible for firms to spend less, but supply more at higher price level, assuming no increase of the SRAS?

According to the interest rate effect theory higher prices will lead to lower GDP demanded because firms will spend less due to loans being more expensive. It seems at odds with what the SRAS curve ...

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