New answers tagged

-1

I think there are two confounding aspects of subjectivity that need to be separated when discussing a market price. A trade offer is an objective manifestation of the subjective state of the economic agents. A market enables large coordination of said subjectivities across objective mechanisms. Even though subjectivities are hard to analize scientifically in ...


1

I think your talking about three different prices and that's the source of your confusion. They can be defined as: bid price - how much buyer is wanting to pay ask/offer price - for how much seller is wanting to sell market price - price at which those two prices meet and actual transactions happen Therefore, market price can thought as 'objective price'. ...


3

The other two up-voted answers are both correct but unnecessarily convoluted for such simple quesiton. Simple answer is that market price is objective. Market price is: The market price is the current price at which an asset or service can be bought or sold. This is as objective as measuring a temperature of a room. You confuse market price and value which ...


5

The market price is the current price at which something may be bought or sold. If a good is not sold or bought at a particular price, then that is not the market price. Whether or not any particular individual thinks that price is too high or too low makes no difference, as the market price is by definition the price that someone is willing to pay/receive ...


4

The vast majority of economists subscribe today to the subjective theory of value that was in economics introduced by Jevons, Walras, and Menger. Subjective theory of value posits that value is subjective. A corollary to that is that there is no correct objective price. However, if you talk about market price existing as an objective number that is ...


5

First, the Sonnenschein-Mantel-Debreu theorem has nothing to do with demand functions. It is a result about excess-demand functions, which represent demand minus supply. They are formulated in the context of an exchange economy in which no production happens. The result says that if one only looks at prices that are not too close to zero, any continuous ...


6

So recently I have been thinking a lot about this fundamental question: Does the Sonnenschein-Mantel-Debreu theorem disprove the "Law of Demand"? It contradicts law of demand as a general law but it is worth noting that the law of demand is for over a century not considered actual general law but just a special case that is simply applicable to ...


2

If everything else stays constant then increase in demand will lead to increase in prices. However, in real life everything constantly changes. For example, if gas producers increase production of gas price may even decrease in long-run. There is also still a lot of unexploited natural gas under the ground. The Our World in Data shows that world's natural ...


1

Generally speaking it depends on parameters of the economy. There is no single answer without specifying exact parameters of the economy. For example, if labor markets are perfectly competitive and government mandates wages to increase above equilibrium wages this would reduce overall welfare as measured by total surplus (see Mankiw Principles of Economics ...


0

Because as Mark Twain is reported to have quipped, "Buy land. They're not making it anymore." Of course, the better explanation is that the image you have supplied merely depicts the short-run market for housing or developed land (pick your poison), which is fixed. Think of it this way: if you were given a substantial sum of money to buy any house, ...


0

I want to take a slightly different approach to understanding why the tax must ultimately fall on the landlord. I think a key point is that is being missed is a time axis. A LVT is suppose a % tax on the value of land. If the value of the raw land changes than the LVT is suppose to automatically adjust. Lets say the LVT was 5%. If every landlord in San Fran ...


9

The claim is that this curve should be a vertical line because no more land can be produced. However, as far as I understand, the supply curve represents the quantity of a product that sellers are willing and able to provide to the marketplace at a given price (see Wikipedia), not the total amount available in stock. What you describe above is quantity ...


1

The price of your service would be determined by the exchange rate for your currency and what people are willing to pay in their own currency, minus a deduction for the inconvenience of having to buy your currency. For example, in a video game that has in-game currency, such as World of Warcraft or The Witcher, how are the prices of in-game items determined....


0

Note that the price can move without any trading at all. For example , Acme closes on Tuesday night at usd 10. Overnight, bad news about the stock comes out. The next morning, it opens at usd 5. As others have described there could also be a large volume of trading, as a new equilibrium price is established. In either case, “stocks fell “ is better than “...


2

It makes almost no economic sense for them to do this. A few things: Opportunity cost. As great and fun as these old games are, Nintendo wouldn't be able to charge very much for them relative to the price of a new product like a Switch. The reason you see higher prices for old consoles/games now is because of their scarcity. Re-producing them would ...


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