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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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Getting a market supply curve from firm supply curve

PFA the image below. As there are n firms in the market, and a tax of t moves up the cost curves of an individual firm by t units, shouldn't the cost curve of the market move up by n*t units? If yes,...
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Economics of Selling Software

My understanding: Normally, selling a product has an increasing marginal cost per unit produced. Very often this increases more and more due to poor allocation of resources (diminishing returns). ...
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Understanding what's in the frequently reported and discussed high demand in IT specialists in Germany - is the IT Fachkräftemangel real?

So far, I can observe the following contradictory evidences what I perceive from the media. Statement group #1. In the press, there are repeated reports from different sources about missing ...
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Does the reciprocal of the price elasticity of demand have an interpretation?

I have 2 related questions that i think are straightforward but am worried I have over-simplified! (i) Suppose the demand curve is downward sloping and the supply curve is upwards sloping. Suppose ...
25 views

Supply/Demand Shift (Find New Equilibrium)

Starting: supply curve $y=x+10$ and demand curve $y = -x+30$ with equilibrium at (10, 20). The problem states that DEMAND shifts leftwards by 3 units and to find the new equilibrium. My professor did ...
45 views

Demand Curve Price not perfectly elastic

I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I ...
33 views

Supply/Demand Curve Equation (beginner) [duplicate]

The linear demand function is $Q_D = a + b(P)$. I understand from this thread that it can be thought of as a simplification/magnification of the overall demand curve. Is there an equation that ...
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Building an square product-to-product table based on rectangular supply and use tables

I need a product-to-product input-output (I-O) table to conduct environmentally extended I-O analysis. I have supply and use tables at basic prices relating different industries and products, but ...
116 views

Economics Behind the Insulin Shortage?

A lot of my family is concerned about a future insulin shortage and it's reported that this shortage is growing. When I read articles from Harvard about it, they imply it's pure greed: There are ...
91 views

By what means do prices change?

The classical supply and demand theory states that prices and quantities of a given good (in a perfectly competitive market) are determined by the supply and demand of that good, a shift in the demand ...
30 views

AMD and Intel duopoly

What kind of duopoly competition model do these two companies "follow"? I'm doing a work in which I aim to analyze the economic outcomes after Intel's chip shortage in november 2018. Any links for a ...
53 views

Origin of the saying “High prices are their own cure.”

Edwin Cannan (1915): An old epigram says that high prices are their own cure. Other variants of this "old epigram" include: High prices cure themselves (1911). High prices cure high prices ...
197 views

Can Direct Taxes on the consumers have a impact on the Demand (rather than supply)?

I'm a 12th-grade student doing a school research paper evaluating the effectiveness of the recent increase in Additional Buyers Stamp Duty in the Singapore Housing market. This tax is directly imposed ...
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Is there any formal definition of a relationship between resource availability and demand?

I do not have any background on economics. So my question might sound too simple and I hope it to be clear enough. I am curious about the following: Is there any formal definition of a relationship ...
992 views

Supply curve when the marginal cost is zero

The supply curve is built as the average marginal cost (MC), when the MC is equal or higher than the average cost (AC) The marginal cost increases, as a result of the opposite effect of marginal ...
1k views

Find optimal price from demand function?

I've been struggling with this for hours, trying to figure out how to solve this. "A perfectly competitive market has the marginal cost function, c (cost is C(y)=cy) and is facing the demand function:...
72 views

Cross price elasticity of demand vs Price elasticity of demand

Is the cross price elasticity of demand between two goods always lower in magnitude than the price elasticities of demand of each good?
113 views

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 ...
1k views

Demand Curve Equation Explanation

I've been reading (trying to brush up on my economics knowledge) and came across the equation: $q_D = a + b(P)$. The variable $a$ is explained as "factors other than price affecting demand." I read ...
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Using capacity share instead of quantity market share in demand estimation (BLP)

If I were to use capacity share (as a proxy of quantity market share) in a demand estimation setup (such as BLP), are there ways to deal or interpret the measurement error? I would consider this ...
30 views

A Question About The Laws Of Demand [duplicate]

The law of demand holds that ceteris paribis, a decrease of demand can be caused by an increase in price. However, it is also true that when demand decreases, the price will decrease, it will fall. ...
523 views

Why can't the Land-Value Tax (in some cases) be passed on to tenants?

According to https://en.wikipedia.org/wiki/Land_value_tax: Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, That doesn't make any sense. If ...
50 views

Does it make economic sense for only some universities in a certain area to pay their sports scholars?

Apparently ‘Athletic scholarships are common in the United States, but in many countries they are rare or non-existent.’ But are there countries where there are some universities that offer sports ...
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Why slope is constant in demand/supply curve?

I was reading Mankiw and it showed variation of demand/supply curve with external factors. However, in all the cases the curves only shifted but didn't change in shape. What I am wondering is why the ...
941 views

Is Bill Gates wrong about supply demand curves?

In a recent tweet (Aug 14th, 2018, reproduced below), Bill Gates said that supply demand curves don't work for software because the first unit costs a lot and every unit after that is free. Isn't this ...
54 views

How can you model/simulate the price/value of a good?

Let's say that you have a good which price can change quite often because of its demand. Let's assume that you developed an algorithm that changes continuously the supply of the good to make its value ...
899 views

Short run Aggregate supply curve is horizontal or positively sloped?

I want to understand the adjustment process from Very short run production decision to Short run production decision to Long run production decision. As far as I've understood: consider an increase in ...
50 views

Empiric evidence of abundance and post-scarcity either transition to it? [closed]

How much are concepts of post-scarcity and abundance economics just ideological/idealist or do we really observing their beginnings already? For example: healthcare: gets more and more expensive ...
60 views

Anti Piketty Confusing Movement Along Demand Curve with Shift

In Anti-Piketty, the author's claim that the statement "If the supply of any good is insufficient and it's price is too high, then demand for that good should decrease which should lead to a decline ...
121 views

What is a good way to generate realistic utility curves?

I am aiming to program a basic simulation of a simplified economy to look at the impact of various interventions. The economy will have N groups of homogeneous consumers and M producer / employer ...