Submission statement: Supply and Demand model are the basic model representing markets, which are of paramount importance both as an expression of individual liberty and driving force of economic prosperity. The post illustrates that understanding this model correctly is essential for understanding market prices and quantities.
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Economists like to say this as “never reason from a price change.” Given two of the equilibrium price, the supply, and the demand, you can find out the third. Given only one (such as the price), you can’t find out either of the other two.
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Submission statement: Supply and Demand model are the basic model representing markets, which are of paramount importance both as an expression of individual liberty and driving force of economic prosperity. The post illustrates that understanding this model correctly is essential for understanding market prices and quantities.
Economists like to say this as “never reason from a price change.” Given two of the equilibrium price, the supply, and the demand, you can find out the third. Given only one (such as the price), you can’t find out either of the other two.