Economics Stack Exchange
Economics Stack Exchange

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.

In microeconomics, Supply and Demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium for price and quantity.

In macroeconomics, supply and demand concept is used in aggregate demand–aggregate supply model (AD–AS), to relate money supply and money demand to interest rates, and to relate labor supply and labor demand to wage rates.

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Why, in supply and demand curves, does price go on the y-axis?

I know it doesn't actually matter which axis is which, but it seems less intuitive me. When I see a supply and/or demand graph, I always have to flip it in my head to feel like I really get what's going on. It just seems like if you have one…
David Bahry
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What does a supply+demand curve look like for fare evasion?

Consider the demand curve for fare evasion on a train. The price (I suppose) would be the average amount of money paid per ride in fines, and the quantity would be the average number of fare evaders caught. The supply curve would quantify the target…
JSideris
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Demand curve from logit model

Is it possible to derive a demand curve from a discrete choice multinomial model. For instance, a logit model would give the probability of purchasing each good. But can I translate that into a demand curve.
Yan Song
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What's the effect of the used car market on car price?

While justifying his decision to sell a one-use textbook to his students, a BYU econ professor states: A word about the Kearl text. I do not receive any royalties and have no economic interest in the text – when you buy the text, not a single …
Heisenberg
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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 (price controls), e2 are the equilibria after price…
John B
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Question About Basic Supply/Demand Concepts

I am learning the basics of Supply/Demand, and I came across this question (it's not a part of my homework; I just want to know the answer/explanation because I'm doing some extra practice problems for a test). Question: "Starch from the stalks of…
EconGuest
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Applying Economic Principles to Other Studies

I was recently reading this article about some research that was done concerning the illegal killing of elephants. There were two quotes that caught my attention: ...illegal killing [of the elephants] increased markedly after 2008 and was…
Mathematician
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Graphics card shortage - why don't they just raise prices?

See e.g. Nvidia CEO: GeForce RTX 3080 and 3090 Shortages To Last Until 2021 (Tom's Hardware, 2020-10-05) The great graphics card shortage of 2020 (and 2021) (BBC, 2021-01-24) Why don't Nvidia and retailers just raise the prices of these graphics…
user18
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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 say. Due to supply chain shortages, suppose the…
paneerlovr
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Why not say the buyer will *definitely* buy at price X?

In supply-and-demand curve, we draw curves of indifference. Say the demand goes through (1, \$1). Then Bob the Buyer is indifferent between spending \$1 for 1 apple or just keeping the \$1. If Sally the Seller had 1 apple to sell, then the…
Yatharth Agarwal
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Tax imposed on customer affects demand or supply curve?

I have a example of supply and demand. If there is a regulation that requires customers to pay additional tax when they purchase cigarettes, would supply or demand curve shift? I know that tax/subsidies is one of supply's non-price determinants,…
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Why does having a single market price maximize quantity traded?

From what I have heard, the exchange of goods defined by the intersection of supply and demand generally maximize quantity traded, although this doesn't apply in cases of monopolies, imperfect information etc. I am trying to understand why this is…
InquisitivePerson
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Demand for utility function given prices and budget

I have to find the consumer's demand at prices $\textbf{p} = (1,1,1)$ and budget $m=4$ when the utility function is given by $$u(x_1,x_2,x_3) = 3 \sqrt{x_1+x_2+2x_3}$$ or when transformed $$\hat{u}(x_1,x_2,x_3) = x_1+x_2+2x_3 $$ I know the answer…
Stranqer95
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Is stock investment an example of demand curves that slope upwards?

The law of demand implies that when the price of a good rises, people buy less of it. This makes the demand curve slope monotonically downwards. A textbook exception is the so-called Giffen good that by definition behaves in the opposite way. But…
sshine
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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 no generic insulins. Over the past twenty years,…
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