Talk:Supply and demand

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 Definition The explanation in economic theory of the factors that influence the supply of, and the demand for, goods and services; and of the market mechanisms by which they are reconciled. [d] [e]

A fresh start

I am inclined to believe that this is all that need be said in this article, given that the reader can learn more by following either of the two links.

It may come as a surprise that I have not used the familiar intersecting curves to illustrate the concepts. I suspect that graphical reasoning is helpful only to those who have a grounding in the physical sciences, and that others find it off-putting. In any case, I do not think that in this case it adds anything that cannot be conveyed by simple verbal logic.

Nick Gardner 05:21, 17 October 2007 (CDT)

Nick - If this article is about the law of supply and demand, then I'd agree that it's developed, though not complete - there should be a discussion about apparent violations of the law of supply and demand, more discussion of elasticity, and the effects of taxes and rationing on the equilibrium. However, if the article is about supply and demand, then there needs to be significantly more added to it, to explain supply, to explain demand, to explain substitution effects, explain time lag effects, etc., as well as those issues which I listed above. Anthony Argyriou 12:32, 25 October 2007 (CDT)

Anthony - I have inserted links to articles on the topics to which you refer - preferring to keep this article easy to read for those who do not need elaboration, while serving as a gateway to other articles for those who do. I should be content to see the title changed to The Law of Supply and Demand.

I have also deleted an inserted paragraph that suggested that the concepts concerned are valid only when a range of assumptions are satisfied - and I have added a final paragraph to refer to cases of zero and negative elasticity.

I intend to place the usual graph on the tutorials page Nick Gardner 05:48, 18 January 2008 (CST)

Nick Gardner 09:51, 5 January 2008 (CST)

graphs inputted, will be adding basic monopoly SD graph. anything else?
Charlie Schaezlein 05:19, 23 March 2008 (CDT)
Charlie (if I may) Excellent! You have saved me a lot of trouble and done it better than I would have - and greatly improved the article. I will add links from the main page shortly. It would be great if you could also put your monopoly graph on the tutorials page of the Competition article. Nick Gardner 17:06, 23 March 2008 (CDT)
I do not understand the inserted sentence Only in some exceptional circumstances (described in the tutorials subpage) can equilibrium not be reached.. If it is a reference to the "cobweb theorem" it deserves further explanation (there is none on the tutorials subpage). But I am inclined to think that that remotely theoretical construction is a needless complication. If I get no objections, I propose to delete the sentence. Nick Gardner 05:42, 31 March 2008 (CDT)

Perfect information, etc.

As far as I understand, the typical assumption in the law of supply and demand is that buyers and sellers have perfect information i.e. the buyers know what prices different sellers are offering goods at. But I've also heard that there have been studies which have shown that the law of supply and demand works even in a non-perfect setting was first demonstrated through classroom experiments by Vernon Smith. Should this be mentioned in the article? Vipul Naik 15:09, 13 April 2008 (CDT)

Thank you for your comment. Prompted by it, I have been listening to a most interesting podcast on the subject by Vernon Smith, and it has given me a glimpse of what you have in mind. I am busy on another article at present, but I will set up a reminder to return to this and try to introduce Vernon Smith's ideas. Thank you again. Nick Gardner 16:24, 13 April 2008 (CDT)

Maybe we should have some dissenting views, such as Malinvaud's disequilibrium theory? We have an article somewhere that discusses Walrasian equilibrium, if I am not mistaken: if so, then we should also link to that.Martin Baldwin-Edwards 17:02, 13 April 2008 (CDT)

Second revision proposed

On returning to this article after a 6-month absence, I feel contrite. I had thought of it as little more than a gateway to other articles - then non-existent - and had consequently given it a somewhat perfunctory treatment. (And as a result, I failed to take account of some valuable comments.) I can now see that that was a mistake, and that the subject deserves a more careful treatment. While retaining links to other articles, I now think it should also be readable as a stand-alone article for the benefit of those who want to use it in that way. So I now plan to embark upon a second revision. Comments by way of guidance would be welcome. Nick Gardner 02:34, 24 April 2008 (CDT)

I think that before going into "determinants of demand" etc., the main premise: that demand responds positively to reduction in price and supply responds positively to increase in price, and that price settles at an equilibrium where demand equals supply, can be stated. A reader can thus get a basic summary of this before embarking on a more detailed study of supply and demand.

Also the reference you link to within the article (Alfred Marshall's book) doesn't work for me (gives an error page). Vipul Naik 19:01, 25 April 2008 (CDT)

Thank you for your help. I had intended to take that basic statement for granted, but I think you are right. I have corrected the Marshall link. Nick Gardner 00:45, 26 April 2008 (CDT)

The supply curve controversy

I have been surprised - and, I admit, confused - by the academic controversy about the supply curve (how to cope with the case of increasing returns) and I feel quite unable to summarise it in terms suitable for the sort of readership that we usually aim at. I have dodged the issue by planning to deal with it on the Tutorials subpage, and I will try to do so there. It is a daunting task, however, and I should welcome help with it. Nick Gardner 11:39, 1 May 2008 (CDT).

I have since had a somewhat inadequate stab at it - see the talk page of the Tutorials subpage. Nick Gardner 11:08, 2 May 2008 (CDT)

First draft of the second revision

Having completed the redraft, I propose to await comments from fellow-economists before returning to it to prepare it for submission for approval.

Considering the importance of the subject, I have been struck by the glib way in which many textbooks gloss over or ignore its conceptual difficulties. My previous draft did the same, but it would probably not be sensible to go too far toward the other extreme. I am not at all confident that I have got the balance right this time. Nick Gardner 05:51, 8 May 2008 (CDT)

If you're mentioning Veblen goods, does it make sense to also mention Giffen goods (i.e. inferior goods where the rise in price actually leads to greater usage)? Vipul Naik

Vipul - Please see the penultimate sentence in the paragraph on "Income effects". Nick Gardner 16:24, 15 May 2008 (CDT)