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But ignoring that difference for a minute, consumption is just the demand at the "equilibrium" point. Nobody is counting all the times someone goes and says "gee, I want to buy some more of this but it's too expensive" or "gee, I wanted to buy some more of this but the shelves were empty" and so the demand curve is unobserved (unobservable?). Similarly with the supply curve.

In the simple equilibrium models of textbook economics, individuals do not set the price (both for consumption and production). The times that someone did not consume don't matter, because someone else will. Same for production.

AFAIK...

by nanne (zwaerdenmaecker@gmail.com) on Sat Nov 10th, 2007 at 11:53:03 AM EST

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