Question

why a linear fucyion may not be adequate for describing the supply and demand fuctions?

Answer 1

lol.... becasue most people are slewed ;)

Answer 2

skewed... ruined a perfectly good bit with a typo...

Answer 3

the economies of scale is a good reason; it is not linear and it affects supply and demand

Answer 4

keynesian economics says that the supply curve is linear and then bends up at the Nrgdp

Answer 5

Linear with respect to what?

Answer 6

linear with respect to supply and demand :)

Answer 7

the demand curve has an inverse relation; and the supply curve has a direct relation; demand increases as price drops and supply increases as prices rise; the point where demand price = supply price is the market price

Answer 8

but economies of scale mean that the price for one item differs with respect to the amount of item being sold; due to the effective use of resources to lower price by quantity

Answer 9

there can also be a max or min at which the curves turn back on themselves and its refered to as laffers curve

Answer 10

Laffers curve refers to tax revenue rates.

Answer 11

tax rates follow a laffer curve; but laffers curve is a generality of many circumstances

Answer 12

Explain how it relates to supply, demand, and price.

Answer 13

lol.... laffers curve is its own explanation; its the relation of price to demand; whether that demand is a supply or a 'demand' there are limits to how many how much and how often we will tolerate things

Answer 14

Laffers curve says that tax rate zero, you collect zero, and at 100% you collect zero, so since it's a continuous function there's a max in between. Is there any supply, price, or demand range that runs from 0% to 100%?

Answer 15

laffers curve is a description of human behavioural outputs given circumstances; it isnt a set in stone device ..

Answer 16

tax rates are a model of laffers curve; not the result of it.... casue and effect..cause and effect

Answer 17

Tax rates are an input to Laffer's curve. They run from 0% to 100%. If you haven't any such range for some variable, you haven't anything that resembles a Laffer curve. There was a Mr. Laffer, and he was specific.

Answer 18

if im wrong about the laffer than im wrong.... but that doesnt change the answer that human behaviour itself is not linear and therefore a linear representation for supply and demand is not always adequat

Answer 19

laffers curve demonstrates the human behaviour is not linear lol

Answer 20

I'm trying to figure out anything remotely close to linear with respect to supply, demand, and price.

Answer 21

the natural Rgdp is a vertical line in the long run supply curve ;)

Answer 22

Rgdp is not familiar to me.

Answer 23

the supply curve modeled by keynesian is horizontal at points to indicate the inelasticity of price to drop

Answer 24

real gross domestic production

Answer 25

at natural Rgdp you are producing as much as you can with the resources available...

Answer 26

supply can only be a vertical representation then; the short run supply curve is skewed, but eventually settles into the long run

Answer 27

if we are producing/supplying all we can ; then a raise in price doesnt equal a raise in supply ..

Answer 28

if we do happen across a situtation where we can become more efficient in the supply; then we can lean into an inflationary condition during the short run...

Answer 29

This is a math forum. A vertical line approached asymptotically does not make the function that approaches it linear. Anything but.

Answer 30

a vertical line is a line lol; its called x = Nrgdp

Answer 31

the slope of the line is undefined; but the line exists

Answer 32

Not all lines represent linear functions. This one doesn't.

Answer 33

well, if we want to get technical about the term 'function' then id have to agree ;)

Answer 34

This whole discussion has to do with some linear function connecting supply, demand, and price in some fashion. I don't see any description that looks anything like a linear function.

Answer 35

So my response to the long-ago question would be, what exactly is the function you're hoping to represent linearly? I haven't heard that yet.

Answer 36

i interpret it as "why is a linear function not good to represent a supply or a demand curve". To wit; becasue human behavior is not linear.

Answer 37

Since human behaviour controls supply and demand; then a linear representation is not gonna be accurate/adequate depending on the amount of precision you wish to find

Answer 38

Do you teach economics somewhere? You spelling suggests you are not in the United States.

Answer 39

teach? nah.... I just finished up a macroeconomics course in college last semester tho... even got an 'A' somehow :)

and im actually in the us :) typing and spelling are not the same brain activity for me .... even tho I got an 'A' in typing too..40 wpm