The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). Purchasing power is the amount of value of a good/services compared to the amount paid with a Currency. The graph depicts an increase in demand from D₁ to D₂, along with a consequent increase in price and quantity Q sold of the product.

In economics, supply and demand describes market relations between prospective sellers and buyers of a good. The supply and demand model determines price and quantity sold in a market. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information This model is fundamental in microeconomic analysis, and is used as a foundation for other economic models and theories. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets It predicts that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. In Economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium values of economic The model incorporates other factors changing equilibrium as a shift of demand and/or supply.

The fundamentals

The intersection of supply and demand curves determines equilibrium price (P0) and quantity (Q0).

Strictly speaking, the model of supply and demand applies to a type of market called perfect competition in which no single buyer or seller has much effect on prices, and prices are known. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. The quantity of a product supplied by the producer and the quantity demanded by the consumer are dependent on the market price of the product. Market price is an economic concept with commonplace familiarity it is the price that a good or service is offered at or will fetch in the marketplace it is of interest mainly in the The law of supply states that quantity supplied is related to price. It is often depicted as directly proportional to price: the higher the price of the product, the more the producer will supply, ceteris paribus ("all other things being equal"). la Cēterīs paribus is a Latin phrase literally translated as "with other things the same The law of demand is normally depicted as an inverse relation of quantity demanded and price: the higher the price of the product, the less the consumer will demand, ceteris paribus. The respective relations are called the supply curve and demand curve, or supply and demand for short.

The laws of supply and demand state that the equilibrium market price and quantity of a commodity is at the intersection of consumer demand and producer supply. At this point, quantity supplied equals quantity demanded (as shown in the figure^[1] ). If the price for a good is below equilibrium, consumers demand more of the good than producers are prepared to supply. This defines a shortage of the good. A shortage results in producers increasing the price until equilibrium is reached. If the price of a good is above equilibrium, there is a surplus of the good. Producers are motivated to eliminate the surplus by lowering the price, until equilibrium is reached.

Supply schedule

The supply schedule, graphically represented by the supply curve, is the relationship between market price and amount of goods produced. In short-run analysis, where some input variables are fixed, a positive slope can reflect the law of diminishing marginal returns, which states that beyond some level of output, additional units of output require larger amounts of input. In Economics, the concept of the short-run refers to the decision-making time frame of a firm in which at least one Factor of production is fixed In Economics, diminishing returns is also called diminishing marginal returns or the law of diminishing returns. In the long-run, where no input variables are fixed, a positively-sloped supply curve can reflect diseconomies of scale. In economic models the long-run time frame assumes no fixed Factors of production.

For a given firm in a perfectly competitive industry, if it is more profitable to produce than to not produce, profit is maximized by producing just enough so that the producer's marginal cost is equal to the market price of the good. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. In Economics and Finance, marginal cost is the change in Total cost that arises when the quantity produced changes by one unit

The supply curve of labour is an example of increasing net input(e. g. , wages) above a certain point resulting in decreased net output (hours worked).

Occasionally, supply curves bend backwards. A well known example is the backward bending supply curve of labour. This Supply curve shows how the change in Real wage rates affects the amount of hours worked by employees Generally, as a worker's wage increases, he is willing to work longer hours, since the higher wages increase the marginal utility of working, and the opportunity cost of not working. A wage is a compensation workers receive in exchange for their labor. In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase Opportunity cost or economic opportunity loss is the value of a product forgone to produce or obtain But when the wage reaches an extremely high amount, the employee may experience the law of diminishing marginal utility. In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase The large amount of money he is making will make further money of little value to him. Thus, he will work less and less as the wage increases, choosing instead to spend his time in leisure. ^[2] The backwards-bending supply curve has also been observed in non-labor markets, including the market for oil: after the skyrocketing price of oil caused by the 1973 oil crisis, many oil-exporting countries decreased their production of oil. The 1973 oil crisis began on October 17 1973 when the members of Organization of Arab Petroleum Exporting Countries (OAPEC consisting of the Arab members of ^[3]

The supply curve for public utility production companies is unusual. A public utility (usually just utility) is an organization that maintains the Infrastructure for a public service (often also providing a service using A large portion of their total costs are in the form of fixed costs. The supply curve for these firms is often constant (shown as a horizontal line).

Another postulated variant of a supply curve is that for child labor. Supply will increase as wages increase, but at a certain point a child's parents will pull the child from the child labor force due to cultural pressures and a desire to concentrate on education. The supply will not increase as the wage increases, up to a point where the wage is high enough to offset these concerns. For a normal demand curve, this can result in two stable equilibrium points - a high wage and a low wage equilibrium point. ^[4]

Demand schedule

The demand schedule, depicted graphically as the demand curve, represents the amount of goods that buyers are willing and able to purchase at various prices, assuming all other non-price factors remain the same. The demand curve is almost always represented as downwards-sloping, meaning that as price decreases, consumers will buy more of the good. ^[1]

Just as the supply curves reflect marginal cost curves, demand curves can be described as marginal utility curves. In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase ^[5]

The main determinants of individual demand are: the price of the good, level of income, personal tastes, the population (number of people), the government policies, the price of substitute goods, and the price of complementary goods. In Economics, one kind of good (or service is said to be a substitute good for another kind insofar as the two kinds of goods can be consumed or used in place of A complementary good or complement good in Economics is a good which is consumed with another good its Cross elasticity of demand is negative

The shape of the aggregate demand curve can be convex or concave, possibly depending on income distribution. In Economics, aggregate demand is the total demand for final goods and services in the economy ( Y) at a given time and Price level.

As described above, the demand curve is generally downward sloping. There may be rare examples of goods that have upward sloping demand curves. Two different hypothetical types of goods with upward-sloping demand curves are a Giffen good (a sweet inferior, but staple, good) and a Veblen good (a good made more fashionable by a higher price). In Economics ( Consumer theory) a Giffen good is that which people consume more of as price rises violating the Law of demand. A staple food is a Food that forms the basis of a Traditional diet. In Economics, Veblen goods are a theoretical group of commodities for which peoples' preference for buying them increases as a direct function of their

Changes in market equilibrium

Practical uses of supply and demand analysis often center on the different variables that change equilibrium price and quantity, represented as shifts in the respective curves. Comparative statics of such a shift traces the effects from the initial equilibrium to the new equilibrium. In Economics, comparative statics is the comparison of two different equilibrium states before and after a change in some underlying Exogenous

Demand curve shifts

Main article: Demand curve

An out-ward or right-ward shift in demand increases both equilibrium price and quantity

When consumers increase the quantity demanded at a given price, it is referred to as an increase in demand. In Economics, the demand curve can be defined as the graph depicting the relationship between the price of a certain Commodity, and the amount of it that Increased demand can be represented on the graph as the curve being shifted outward. At each price point, a greater quantity is demanded, as from the initial curve D1 to the new curve D2. More people wanting coffee is an example. In the diagram, this raises the equilibrium price from P1 to the higher P2. This raises the equilibrium quantity from Q1 to the higher Q2. A movement along the curve is described as a "change in the quantity demanded" to distinguish it from a "change in demand," that is, a shift of the curve. In the example above, there has been an increase in demand which has caused an increase in (equilibrium) quantity. The increase in demand could also come from changing tastes, incomes, product information, fashions, and so forth.

If the demand decreases, then the opposite happens: an inward shift of the curve. If the demand starts at D2, and decreases to D1, the price will decrease, and the quantity will decrease. This is an effect of demand changing. The quantity supplied at each price is the same as before the demand shift (at both Q1 and Q2). The equilibrium quantity, price and demand are different. At each point, a greater amount is demanded (when there is a shift from D1 to D2).

Supply curve shifts

An out-ward or right-ward shift in supply reduces equilibrium price but increases quantity

When the suppliers' costs change for a given output, the supply curve shifts in the same direction. For example, assume that someone invents a better way of growing wheat so that the cost of wheat that can be grown for a given quantity will decrease. Wheat ( Triticum spp is a worldwide cultivated grass from the Levant area of the Middle East. Otherwise stated, producers will be willing to supply more wheat at every price and this shifts the supply curve S1 outward, to S2—an increase in supply. This increase in supply causes the equilibrium price to decrease from P1 to P2. The equilibrium quantity increases from Q1 to Q2 as the quantity demanded increases at the new lower prices. In a supply curve shift, the price and the quantity move in opposite directions.

If the quantity supplied decreases at a given price, the opposite happens. If the supply curve starts at S2, and shifts inward to S1, the equilibrium price will increase, and the quantity will decrease. This is an effect of supply changing. The quantity demanded at each price is the same as before the supply shift (at both Q1 and Q2). The equilibrium quantity, price and supply changed.

When there is a change in supply or demand, there are four possible movements. The demand curve can move inward or outward. The supply curve can also move inward or outward.

See also: Induced demand

Elasticity

Main article: Elasticity (economics)

A very important concept in understanding supply and demand theory is elasticity. Induced demand is the phenomenon that after supply increases more of a good is consumed In Economics, elasticity is the ratio of the percent change in one variable to the percent change in another variable In this context, it refers to how supply and demand respond to various factors. One way to define elasticity is the percentage change in one variable divided by the percentage change in another variable (known as arc elasticity, which calculates the elasticity over a range of values, in contrast with point elasticity, which uses differential calculus to determine the elasticity at a specific point). It is a measure of relative changes.

Often, it is useful to know how the quantity demanded or supplied will change when the price changes. This is known as the price elasticity of demand and the price elasticity of supply. In Economics and business studies the price elasticity of demand (PED is a measure of the sensitivity of quantity demanded to changes in price In Economics, the price elasticity of supply is defined as a numerical measure of the responsiveness of the quantity supplied of product (A to a change in price of product (A If a monopolist decides to increase the price of their product, how will this affect their sales revenue? Will the increased unit price offset the likely decrease in sales volume? If a government imposes a tax on a good, thereby increasing the effective price, how will this affect the quantity demanded?

Another distinguishing feature of elasticity is that it is more than just the slope of the function. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient For example, a line with a constant slope will have different elasticity at various points. Therefore, the measure of elasticity is independent of arbitrary units (such as gallons vs. quarts, say for the response of quantity demanded of milk to a change in price), whereas the measure of slope only is not.

One way of calculating elasticity is the percentage change in quantity over the associated percentage change in price. For example, if the price moves from $1. 00 to $1. 05, and the quantity supplied goes from 100 pens to 102 pens, the slope is 2/0. 05 or 40 pens per dollar. Since the elasticity depends on the percentages, the quantity of pens increased by 2%, and the price increased by 5%, so the price elasticity of supply is 2/5 or 0. 4.

Since the changes are in percentages, changing the unit of measurement or the currency will not affect the elasticity. If the quantity demanded or supplied changes a lot when the price changes a little, it is said to be elastic. If the quantity changes little when the prices changes a lot, it is said to be inelastic. An example of perfectly inelastic supply, or zero elasticity, is represented as a vertical supply curve. Supply and demand is an Economic model describing effects on price and quantity in a Market. (See that section below)

Elasticity in relation to variables other than price can also be considered. One of the most common to consider is income. Income, refers to consumption opportunity gained by an entity within a specified time frame which is generally expressed in monetary terms How would the demand for a good change if income increased or decreased? This is known as the income elasticity of demand. In economics the income elasticity of demand measures the responsiveness of the quantity demanded of a good to the change in the income of the people demanding the For example, how much would the demand for a luxury car increase if average income increased by 10%? If it is positive, this increase in demand would be represented on a graph by a positive shift in the demand curve. At all price levels, more luxury cars would be demanded.

Another elasticity sometimes considered is the cross elasticity of demand, which measures the responsiveness of the quantity demanded of a good to a change in the price of another good. In Economics, the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the This is often considered when looking at the relative changes in demand when studying complement and substitute goods. A complementary good or complement good in Economics is a good which is consumed with another good its Cross elasticity of demand is negative In Economics, one kind of good (or service is said to be a substitute good for another kind insofar as the two kinds of goods can be consumed or used in place of Complement goods are goods that are typically utilized together, where if one is consumed, usually the other is also. Substitute goods are those where one can be substituted for the other, and if the price of one good rises, one may purchase less of it and instead purchase its substitute.

Cross elasticity of demand is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For an example with a complement good, if, in response to a 10% increase in the price of fuel, the quantity of new cars demanded decreased by 20%, the cross elasticity of demand would be -2. 0.

Vertical supply curve (Perfectly Inelastic Supply)

When demand D₁ is in effect, the price will be P₁. When D₂ is occurring, the price will be P₂. Notice that at both values the quantity is Q. Since the supply is fixed, any shifts in demand will only affect price.

It is sometimes the case that a supply curve is vertical: that is the quantity supplied is fixed, no matter what the market price. For example, the surface area or land of the world is fixed. Land in Economics comprises all naturally occurring resources whose supply is inherently fixed (i No matter how much someone would be willing to pay for an additional piece, the extra cannot be created. Also, even if no one wanted all the land, it still would exist. Land therefore has a vertical supply curve, giving it zero elasticity (i. e. , no matter how large the change in price, the quantity supplied will not change).

Supply-side economics argues that the aggregate supply function – the total supply function of the entire economy of a country – is relatively vertical. Supply-side economics is an arguably heterodox school of Macroeconomic thought that argues that economic growth can be most effectively created using incentives for Thus, supply-siders argue against government stimulation of demand, which would only lead to inflation with a vertical supply curve. ^[6]

Other markets

The model of supply and demand also applies to various specialty markets.

The model applies to wages, which are determined by the market for labor. A wage is a compensation workers receive in exchange for their labor. The typical roles of supplier and consumer are reversed. The suppliers are individuals, who try to sell their labor for the highest price. The consumers of labors are businesses, which try to buy the type of labor they need at the lowest price. The equilibrium price for a certain type of labor is the wage. ^[7]

The model applies to interest rates, which are determined by the money market. Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets In Finance, the money market is the global Financial market for short-term borrowing and lending In the short term, the money supply is a vertical supply curve, which the central bank of a country can control through monetary policy. In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, The demand for money intersects with the money supply to determine the interest rate. ^[8]

Other market forms

The supply and demand model is used to explain the behavior of perfectly competitive markets, but its usefulness as a standard of performance extends to other types of markets. In such markets, there may be no supply curve, such as above, except by analogy. Rather, the supplier or suppliers are modeled as interacting with demand to determine price and quantity. In particular, the decisions of the buyers and sellers are interdependent in a way different from a perfectly competitive market.

A monopoly is the case of a single supplier that can adjust the supply or price of a good at will. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient The profit-maximizing monopolist is modeled as adjusting the price so that its profit is maximized given the amount that is demanded at that price. This price will be higher than in a competitive market. A similar analysis can be applied when a good has a single buyer, a monopsony, but many sellers. In Economics, a monopsony (from Ancient Greek μόνος (monos "single" + ὀψωνία (opsōnia "purchase" is a Market form Oligopoly is a market with so few suppliers that they must take account of their actions on the market price or each other. An oligopoly is a Market form in which a Market or Industry is dominated by a small number of sellers (oligopolists Game theory may be used to analyze such a market. Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering,

The supply curve does not have to be linear. However, if the supply is from a profit-maximizing firm, it can be proven that curves-downward sloping supply curves (i. e. , a price decrease increasing the quantity supplied) are inconsistent with perfect competition in equilibrium. Then supply curves from profit-maximizing firms can be vertical, horizontal or upward sloping.

Positively-sloped demand curves?

Standard microeconomic assumptions cannot be used to disprove the existence of upward-sloping demand curves. However, despite years of searching, no generally agreed upon example of a good that has an upward-sloping demand curve (also known as a Giffen good) has been found. In Economics ( Consumer theory) a Giffen good is that which people consume more of as price rises violating the Law of demand. Some suggest that luxury cosmetics can be classified as a Giffen good. As the price of a high end luxury cosmetic drops, consumers see it as an low quality good compared to its peers. The price drop may indicate lower quality ingredients, thus consumers would not want to apply such an inferior product to their face.

Lay economists sometimes believe that certain common goods have an upward-sloping curve. For example, people will sometimes buy a prestige good (eg. a luxury car) because it is expensive, a drop in price may actually reduce demand. However, in this case, the good purchased is actually prestige, and not the car itself. So, when the price of the luxury car decreases, it is actually decreasing the amount of prestige associated with the good (see also Veblen good). In Economics, Veblen goods are a theoretical group of commodities for which peoples' preference for buying them increases as a direct function of their However, even with downward-sloping demand curves, it is possible that an increase in income may lead to a decrease in demand for a particular good, probably due to the existence of more attractive alternatives which become affordable: a good with this property is known as an inferior good. In Consumer theory, an inferior good is a good that decreases in demand when consumer income rises unlike Normal goods for which the opposite is observed

Negatively-sloped supply curve

There are cases where the price of goods gets cheaper, but more of those goods are produced. This is usually related to economies of scale and mass production. Mass production (also called flow production, repetitive flow production, series production, or serial production) is the production of One special case is computer software where creating the first instance of a given computer program has a high cost, but the marginal cost of copying this program and distributing it to many consumers is low (almost zero).

Empirical estimation

Demand and supply relations in a market can be statistically estimated from price, quantity, and other data with sufficient information in the model. Debt AIDS Trade in Africa (or DATA) is a Multinational non-government organization founded in January 2002 in London by U2 's This can be done with simultaneous-equation methods of estimation in econometrics. In Mathematics, a system of linear equations (or linear system) is a collection of Linear equations involving the same set of Variables For example Econometrics is concerned with the tasks of developing and applying Quantitative or Statistical methods to the study and elucidation of economic principles Such methods allow solving for the model-relevant "structural coefficients," the estimated algebraic counterparts of the theory. The Parameter identification problem is a common issue in "structural estimation. The parameter identification problem is a problem which can occur in the estimation of multiple-equation Econometric models where the equations have variables in common " Typically, data on exogenous variables (that is, variables other than price and quantity, both of which are endogenous variables) are needed to perform such an estimation. Exogenous (or exogeneous) (from the Greek words "exo" and "gen" meaning "outside" and "production" refers to an action or In an economic model, parameters or variables are said to be endogenous when they are predicted by other variables in the model An alternative to "structural estimation" is reduced-form estimation, which regresses each of the endogenous variables on the respective exogenous variables. In Social science and Statistics, particularly Econometrics, the Reduced form of a system of equations is the result of solving the system for the

Macroeconomic uses of demand and supply

Demand and supply have also been generalized to explain macroeconomic variables in a market economy, including the quantity of total output and the general price level. Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a Real GDP is a macroeconomic measure of the size of an economy adjusted for price changes and inflation A price level is a hypothetical measure of overall prices for some set of goods and services in a given region during a given interval normalized relative to some The Aggregate Demand-Aggregate Supply model may be the most direct application of supply and demand to macroeconomics, but other macroeconomic models also use supply and demand. The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains Price level and output through the relationship of Compared to microeconomic uses of demand and supply, different (and more controversial) theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole In Economics, aggregate demand is the total demand for final goods and services in the economy ( Y) at a given time and Price level. In Economics, aggregate supply is the total supply of goods and services produced by a national economy during a specific time period Demand and supply may also be used in macroeconomic theory to relate money supply to demand and interest rates. In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets

Demand shortfalls

A demand shortfall results from the actual demand for a given product being lower than the projected, or estimated, demand for that product. A benefit shortfall results from the actual benefits of a venture being lower than the projected or estimated benefits of that venture Demand shortfalls are caused by demand overestimation in the planning of new products. Demand overestimation is caused by optimism bias and/or strategic misrepresentation. Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions Strategic misrepresentation is the planned systematic distortion or misstatement of fact—lying—in response to incentives in the Budget process

History

The phrase "supply and demand" was first used by James Denham-Steuart in his Inquiry into the Principles of Political Economy, published in 1767. Sir James Denham-Steuart 7th Baronet ( 21 October 1712 &ndash 26 November 1780) was a British Economist. Adam Smith used the phrase in his 1776 book The Wealth of Nations, and David Ricardo titled one chapter of his 1817 work Principles of Political Economy and Taxation "On the Influence of Demand and Supply on Price". Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. David Ricardo (18 April 1772 &ndash 11 September 1823 was an English political economist, often credited with systematizing economics and was one of the most influential On the Principles of Political Economy and Taxation ( 1817) is a Book by David Ricardo on Economics. ^[9]

In The Wealth of Nations, Smith generally assumed that the supply price was fixed but that its "merit" (value) would decrease as its "scarcity" increased, in effect what was later called the law of demand. Ricardo, in Principles of Political Economy and Taxation, more rigorously laid down the idea of the assumptions that were used to build his ideas of supply and demand. Antoine Augustin Cournot first developed a mathematical model of supply and demand in his 1838 Researches on the Mathematical Principles of the Theory of Wealth. Antoine Augustin Cournot ( 28 August 1801 ‑ 31 March 1877) was a French economist Philosopher and Mathematician

During the late 19th century the marginalist school of thought emerged. This field mainly was started by Stanley Jevons, Carl Menger, and Léon Walras. William Stanley Jevons ( September 1, 1835 - August 13, 1882) English Economist and Logician, was born in This article is about the economist not about his son the mathematician Karl Menger. Marie-Esprit-Léon Walras ( December 16, 1834 in Évreux, France - January 5, 1910 in Clarens near Montreux The key idea was that the price was set by the most expensive price, that is, the price at the margin. This was a substantial change from Adam Smith's thoughts on determining the supply price.

In his 1870 essay "On the Graphical Representation of Supply and Demand", Fleeming Jenkin drew for the first time the popular graphic of supply and demand which, through Marshall, eventually would turn into the most famous graphic in economics. Henry Charles Fleeming Jenkin ( 25 March 1833 &ndash 12 June 1885) was Professor of Engineering at the University

The model was further developed and popularized by Alfred Marshall in the 1890 textbook Principles of Economics. Alfred Marshall (born 26 July 1842 in Bermondsey, London, England, died 13 July 1924 in Cambridge ^[9] Along with Léon Walras, Marshall looked at the equilibrium point where the two curves crossed. Marie-Esprit-Léon Walras ( December 16, 1834 in Évreux, France - January 5, 1910 in Clarens near Montreux They also began looking at the effect of markets on each other.

See also

References

External links

• Nobelpricewinner Prof. William Vickrey: 15 fatal fallacies of financial fundamentalism-A Disquisition on Demand Side Economics

• "Marshallian Cross Diagrams and Their Uses before Alfred Marshall: The Origins of Supply and Demand Geometry" by Thomas Humphrey (via the Richmond Fed)
• Supply and Demand book by Hubert D. Henderson at Project Gutenberg.
• Price Theory and Applications by Steven E. Landsburg ISBN 0-538-88206-9
• An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776 [1]
• By what is the price of a commodity determined?, a brief statement of Karl Marx's rival account [2]
• The Economic Motivation of Open Source Software: Stakeholder Perspectives, Dirk Riehle, 2007 [3]
• Supply and Demand by Fiona Maclachlan and Basic Supply and Demand by Mark Gillis, The Wolfram Demonstrations Project. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy.