The Mises Community
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.
Forums
 »
Economics
 »
Economics Questions
 »
Is all of economics reducible to supply and demand?

Thank you for your participation and interest in the Mises Community. This software platform has seen its day, however, and so is now closed. We are redoing our entire site, so look for some exciting developments by the end of the year. Thank you for your support of Austrian economics, liberty, and peace.

Is all of economics reducible to supply and demand?

rated by 0 users
Answered (Verified) This post has 1 verified answer | 4 Replies | 2 Followers

Not Ranked
Male
57 Posts
Points 1,635
Austen posted on Sat, Oct 13 2012 3:46 AM

Is all of economics reducible to supply and demand?

Answered (Verified) Verified Answer

Top 50 Contributor
Male
2,439 Posts
Points 44,650
Reply
Answered (Verified) Neodoxy replied on Sat, Oct 13 2012 12:47 PM
Verified by Austen

In market exchange, mostly, with the arguable exception of monopoly price since technically a monopoly capable of setting its price has no demand curve beyond a single point which it sets at any one time. What's more important to the market, however, is understanding what makes those supply and demand curve, and the implications of those curves. Most importantly there are concepts, such as public good, consumer's sovereignty, and business cycle theory which cannot be described by S and D. However, prettymuch the entire market process can be displayed with these graphs... So kind of.

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
  • | Post Points: 25

All Replies

Top 100 Contributor
Male
907 Posts
Points 14,780
Reply
Andris Birkmanis replied on Sat, Oct 13 2012 4:13 AM

The simplest counter-example is Crusoe economy.

The Voluntaryist Reader - read, comment, post your own.
  • | Post Points: 5
Top 50 Contributor
Male
2,939 Posts
Points 49,110
Reply
Answered (Not Verified) Conza88 replied on Sat, Oct 13 2012 11:03 AM
Suggested by grant.w.underwood

Human action.

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
  • | Post Points: 5
Top 500 Contributor
128 Posts
Points 2,945
Reply
Answered (Not Verified) Friedmanite replied on Sat, Oct 13 2012 12:44 PM

If you're asking whether the price of a good is completely determined by supply and demand, this isn't true.  Consider the concept of elasticities.

  • | Post Points: 5
Top 50 Contributor
Male
2,439 Posts
Points 44,650
Reply
Answered (Verified) Neodoxy replied on Sat, Oct 13 2012 12:47 PM
Verified by Austen

In market exchange, mostly, with the arguable exception of monopoly price since technically a monopoly capable of setting its price has no demand curve beyond a single point which it sets at any one time. What's more important to the market, however, is understanding what makes those supply and demand curve, and the implications of those curves. Most importantly there are concepts, such as public good, consumer's sovereignty, and business cycle theory which cannot be described by S and D. However, prettymuch the entire market process can be displayed with these graphs... So kind of.

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
  • | Post Points: 25
Page 1 of 1 (5 items) | RSS

Ludwig von Mises Institute | 518 West Magnolia Avenue | Auburn, Alabama 36832-4528

Phone: 334.321.2100 · Fax: 334.321.2119

contact@Mises.org | webmaster | AOL-IM MainMises

Mises.org sitemap