I just realized my equation is slightly off. It should be:
PS*S = PD*D
Supply and Demand modify the price, and the two separate prices(supply and demand side) then either equal or give you unequal values that can determine the difference between supply and demand. The difference is the maximum that a side would have to alter its price to meet the other side's price.
In addition, the graph given has reversed supply and demand lines. Supply should decrease it's price with additional quantity. Demand should increase it's price with additional quantity. I don't know of any product or service where additional supply increases price while increased demand decreases price.
Topic: The Flaw of Supply and Demand (Read 4807 times)
Then prove him wrong and calculate price by replacing the supply
and demand variables with numbers.
Calculate supply by replacing the price and demand variables with numbers.
Calculate demand by replacing the price and supply variables with numbers.
Use this graph for your calculations.
ingrimayne.com/econ/DemandSupply/Figure4.5.gif
P = Price, S = Supply, D = Demandand demand variables with numbers.
Calculate supply by replacing the price and demand variables with numbers.
Calculate demand by replacing the price and supply variables with numbers.
Use this graph for your calculations.
ingrimayne.com/econ/DemandSupply/Figure4.5.gif
P + S = P + D
3.00 + S = 3.00 + 70
S = 3.00 - 3.00 + 70
S = 70
P + S = P + D
3.00 + 70 = 3.00 + D
3.00 - 3.00 + 70 = D
70 = D
P + S = P + D
P + 70 = P + 70
P - P = 70 - 70
0 = 0
Ok, he's wrong.
Edited: May 30, 2011, 05:44:37 pm
@cindylove
No not clear at all. In fact you confused me.
No not clear at all. In fact you confused me.
Then prove him wrong and calculate price by replacing the supply
and demand variables with numbers.
Calculate supply by replacing the price and demand variables with numbers.
Calculate demand by replacing the price and supply variables with numbers.
Use this graph for your calculations.
ingrimayne.com/econ/DemandSupply/Figure4.5.gif
and demand variables with numbers.
Calculate supply by replacing the price and demand variables with numbers.
Calculate demand by replacing the price and supply variables with numbers.
Use this graph for your calculations.
ingrimayne.com/econ/DemandSupply/Figure4.5.gif
Please explain.
Quote from: Original Article
The graphs sometimes show straight, sometimes curved lines. But any two intersecting lines produce the same result. The nature of the lines on the graphs is irrelevant.
This is one example. The nature of the lines is clearly relevant because if the line is curved, any shift up or down the line will be more/less dramatic than it would be in a straight line. And integral of the line function would show how changes in market pressure would affect the price. The type of line obviously matters. This author is a fucking moron.
That thing was so stupid I want to punch my monitor. So many inconsistencies from a professor of logic and philosophy. Wow.
Please explain.
That thing was so stupid I want to punch my monitor. So many inconsistencies from a professor of logic and philosophy. Wow.
Not just ridiculous; it's frankly insane.
Also, I find it hilarious (in the archaic sense of the word) that supposed "liberals", those wonderful paragons of compassion and peace, think that wars are just dandy whenever it's one of their guys running them. The "Good War" is a progressive myth that was only recently adopted by neoconservatives, which are basically progressives who are more honest about their attitude towards foreign policy.
Also, I find it hilarious (in the archaic sense of the word) that supposed "liberals", those wonderful paragons of compassion and peace, think that wars are just dandy whenever it's one of their guys running them. The "Good War" is a progressive myth that was only recently adopted by neoconservatives, which are basically progressives who are more honest about their attitude towards foreign policy.
Quote from: Andris
Austrians use the boom of the Long Depression to bolster their arguments despite the widespread suffering, but when a major government intervention unequivocally -ends- that suffering (alongside a boom),
First of all, there was enormous increase in 1) wages and 2) life expectancy during the "Long Depression". The economy grew at its fastest rate in US history, and this was market driven growth, meaning it reflected an increase in what people actually demanded, not government-spending driven growth where the increase is in value as arbitrarily defined by government.
Second, there was great suffering during WW2, and a huge debt had to be accrued during that period. To claim that it ended suffering, when it was associated with forced labor (drafting of people into essential industries), rationing, a terrible war, and an enormous deficit that sapped the economy for years to come, is ridiculous.
Because the US was really suffering in the postware period compared to the prewar.
This is just plain bullshit.
Go break your own windows and see how rich you get. Leave mine alone, thanks.
GDP doesn't measure wealth.
You can make GDP look good by routinely demolishing cities and rebuilding them without a war. War is just the excuse.
You can make GDP look good by routinely demolishing cities and rebuilding them without a war. War is just the excuse.
This is funny. Austrians use the boom of the Long Depression to bolster their arguments despite the widespread suffering, but when a major government intervention unequivocally -ends- that suffering (alongside a boom), it doesn't count. Because the US was really suffering in the postware period compared to the prewar.
Who gives a shit if GDP is high when your life is getting worse.
In other words.
http://www.youtube.com/watch?v=GTQnarzmTOc#t=3m06s
In order to believe the increase in GDP you have to believe that an average annual rate 13% growth over 4 years which is greater than any other in history took place when 16 million working men were put into the military, and they were replaced by inexperienced teenagers, women with little to no experience in those industries, and elderly men. And then when they returned, the economy's output would fall by 22% in 2 years.
What about this is plausible? Those statistics are bullshit. Here's why.
Most of the economy was under the command of government. They ordered producers to make things, and then gave those things prices decided by the government. When you add those arbitrary prices up, you get a massive arbitrary number. Thus the GDP data you cite is moronic to think actually represents growth, and not some faulty accounting trick.
In other words.
http://www.youtube.com/watch?v=GTQnarzmTOc#t=3m06s
In order to believe the increase in GDP you have to believe that an average annual rate 13% growth over 4 years which is greater than any other in history took place when 16 million working men were put into the military, and they were replaced by inexperienced teenagers, women with little to no experience in those industries, and elderly men. And then when they returned, the economy's output would fall by 22% in 2 years.
What about this is plausible? Those statistics are bullshit. Here's why.
Most of the economy was under the command of government. They ordered producers to make things, and then gave those things prices decided by the government. When you add those arbitrary prices up, you get a massive arbitrary number. Thus the GDP data you cite is moronic to think actually represents growth, and not some faulty accounting trick.
GDP doesn't measure wealth.
You can make GDP look good by routinely demolishing cities and rebuilding them without a war. War is just the excuse.
You can make GDP look good by routinely demolishing cities and rebuilding them without a war. War is just the excuse.
Only as compared to, say, destroying all resources before they could be consumed in a useful fashion. Mussolini also made the trains run on time.
Anything can be said to "work" if opportunity cost is ignored.
Anything can be said to "work" if opportunity cost is ignored.
It was the greatest three-year economic boom in US history. Ever. Sustained real GDP growth of ~17%, for a nation that was already the world's largest economy.
Ideal? Certainly not. It all went to armaments and logistics and things that only indirectly improved America's real wealth, but you can see that all that money ended up getting pumped into the private sector when the war was over. But the United States never saw that sort of sustained growth before or since.
That's only one definition of an axiom, and it's not the one being used.
Try to disprove the principle (from which the law of supply and demand logically follows) that people always act in accordance with what they believe, at the moment of action, will meet their most immediate achievable end. You can't do it without proving it in the process. So unless you can show that supply and demand do not logically follow from that principle (which it does), it's as solid a law as 2+2 equalling 4. Any supposed exception to it will be found, given sufficient data, not to be an exception at all.
Try to disprove the principle (from which the law of supply and demand logically follows) that people always act in accordance with what they believe, at the moment of action, will meet their most immediate achievable end. You can't do it without proving it in the process. So unless you can show that supply and demand do not logically follow from that principle (which it does), it's as solid a law as 2+2 equalling 4. Any supposed exception to it will be found, given sufficient data, not to be an exception at all.
Supply and Demand being those axioms?
Maybe you should read the part where he refutes those axioms.
Axioms (unless redundant) cannot be derived by principles of deduction, nor are they demonstrable by mathematical proofs, simply because they are starting points; there is nothing else from which they logically follow (otherwise they would be classified as theorems).
Economic Definition of axiom.
erm axiom Definition: A basic precondition or assumption underlying a theory. Axioms are basic, unverifiable world view assumptions, including personal beliefs, political views, and cultural values, that form the foundation of a theory. These axioms can not be verified with real world data, and as such are largely accepted on faith. Belief in a supreme, omnipotent, omniscience being is one such axiom. The notion that people are basically good (or bad) is another.
The "Law" of Supply and Demand is a faith.
Why are we not using an economic system that uses real world data to make real world decisions?
Maybe you should read the part where he refutes those axioms.
Axioms (unless redundant) cannot be derived by principles of deduction, nor are they demonstrable by mathematical proofs, simply because they are starting points; there is nothing else from which they logically follow (otherwise they would be classified as theorems).
Economic Definition of axiom.
erm axiom Definition: A basic precondition or assumption underlying a theory. Axioms are basic, unverifiable world view assumptions, including personal beliefs, political views, and cultural values, that form the foundation of a theory. These axioms can not be verified with real world data, and as such are largely accepted on faith. Belief in a supreme, omnipotent, omniscience being is one such axiom. The notion that people are basically good (or bad) is another.
The "Law" of Supply and Demand is a faith.
Why are we not using an economic system that uses real world data to make real world decisions?
In reply to the OP: any graphical representation of an economic law will be imperfect. But the law itself can be deduced from irrefutable axioms. One cannot attempt to refute the law of supply and demand without, ultimately, attempting to refute the action axiom - which is a performative contradiction.
And yet, during World War II, rationing did work.
Only as compared to, say, destroying all resources before they could be consumed in a useful fashion. Mussolini also made the trains run on time.
Anything can be said to "work" if opportunity cost is ignored.
Part of the point. Not all resources are scarce.
+2
And resources that are scarce can be produced, warehoused, and distributed in such a way, that for all practical purposes they are in abundance all the time.
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