Community Discussions
Explore the latest discussions and community conversations related to this domain.
Law of Supply
Main Post:
I know this is a very basic question, but this is something I just don't understand. Why must price increase for supply to increase? Why can't firms simply supply more at the same price, because that is still profitable. When I've asked my friends, they've used Price elasticity of Demand, something that we have not learnt yet, so if that is a key part of the explanation, please do explain it. Thanks.
Top Comment:
Great question! Supply is less intuitive than demand, so more people should be asking this imo.
Remember suppliers have choices. When they're producing one thing, the opportunity cost is the other things they don't produce. So increasing production of tee shirts means they must decrease production of another product, like pants. For producers to do this, tee shirts must become relatively more profitable than pants, so the price of tee shirts must rise ceteris paribus.
Separately, it's assumed that producing more occurs higher per unit costs (at least in the short run). So producing more requires a higher price.
The above can be summarized as supplier desire and supplier ability respectively. To want to produce more, and to be able to produce more, the price must go up.
price - Understanding the law of supply - Economics Stack Exchange
Main Post: price - Understanding the law of supply - Economics Stack Exchange
Recommended school supply list / budget for first year law student
Main Post:
Currently working on budget for first year of law school and would like to get recommendations from current law students on what to anticipate buying? What were unexpected expenses you encountered which you'd recommend I plan for?
Top Comment:
Just some thoughts.
- Amazon Prime. Seriously. Nothing like knowing you need something and just buying it online, knowing it will be at your apartment / dorm within 2 days. Serious time saver. Especially helpful during finals.
- Macbook Air. Has a battery life of 12 hours, which is extremely helpful. You'll need the customary suite of software - at a minimum, Word and Powerpoint.
- At least 1 good traditional suit (black, gray, or navy), properly tailored with a decent belt and shoes, several ties, and several white or light blue dress shirts. Figure about $600 - $1000, depending.
- I spend about $1000 - $1200 on textbooks a semester. Unlike everyone else in the known law school universe, I keep my books.
- Quick money - as time crunches, you may not have time to do things like shop or launder clothes. So plan on spending money to eat out, dry clean, and launder your clothes during crunch time.
- Printer and supplies - you'll spend more on ink and paper than you anticipated. Outlines are long. And friends like a printer that works.
- Supplementary materials - plan on spending about $50 a class on supplements.
ELI5: Regarding the Law of Supply, why doesn't quantity supplied increase whether the price is low or the price is high?
Main Post:
The Law of Supply states that as price of a good increases, the quantity supplied also increases.
First of all, what causes price increases in the first place- is it the interaction of production and consumption? Is it related to cost of production or are they arbitrary increases, according to the Law of Supply?
Given price increases, though, quantity supplied increases. What is the relationship with time here- meaning, does quantity supplied increase purely because more money will be made with higher prices, or is it a response to higher price which means greater cost of production, and so a greater quantity sold will help pay it off. I would think that whether price increases or decreases, one would want to produce as much as possible so long as they sell. If price decreases, I would think this means more people could afford it, so then you would want to produce more to sell more. Or at least cost of production is commensurately lower. But it's unclear what and how much to consider when examining the relationship of price and quantity supplied when looking at the Law of Supply in isolation. Thanks!
Top Comment: But it's unclear what and how much to consider when examining the relationship of price and quantity supplied when looking at the Law of Supply in isolation I think this is your problem! It seems like you understand the law of supply perfectly well. The trouble is that you can't use the law of supply in isolation to determine price and quantity. The law of supply explains what suppliers want. They want to sell the most units possible at the highest price possible. That makes perfect sense, right? (Note that the supply curve shows the minimum price they'll accept. They'll actually take any price above the curve, if they can.) So what's stopping suppliers selling as much as possible at the highest price possible? The law of demand! Purchasers only want a certain amount of a good at any given price. So excess units or higher prices won't sell.
ELI5: Law of Supply and Demand. Do we need to conform to it?
Main Post:
I researched that prices goes up when the supply of it becomes less or the demand of it becomes higher, but should the merchant really increase their prices? Why?
What will happen in the market/economy if the merchants does not increase their prices and just retain it as before?
Top Comment:
but should the merchant really increase their prices? Why?
Because they can and would earn more money if they did.
What will happen in the market/economy if the merchants does not increase their prices and just retain it as before?
The merchants would sell out of goods and not collect as much money as they could.
The Law of Supply and Demand Isn’t Fair
Main Post: The Law of Supply and Demand Isn’t Fair
Top Comment:
Econ 101: Markets are great at providing efficient allocations but might suck at distibutional equality.
Germany set to pass ‘humanitarian’ supply chain law
Main Post: Germany set to pass ‘humanitarian’ supply chain law
Top Comment:
Does anyone know of a supply chain project on hedera? There are so many opportunities. I know there is one for sharing neighbourhood electricity generated by solar power.
The Law of Supply and Demand Is A Myth
Main Post: The Law of Supply and Demand Is A Myth
Top Comment:
This is just asinine. Who doesn't believe in the law of demand?
You're saying your 5th chocolate bar is worth the same to you as your 1st chocolate bar? No.
Law Bird Supply House now open in Grandview Heights
Main Post: Law Bird Supply House now open in Grandview Heights
Top Comment:
I'll take that advice under cooperation, alright? Let's say you and I go toe-to-toe on bird law and see who comes out the victor..
Shop supply fees: what is reasonable?
Main Post:
Just did an oil change ($19) and an alignment ($85) at a local shop and was charged $11 in shop supply fees on top of that. Is that reasonable or should I look for another shop in the future? When I complained, the guy said they just charge a certain percentage of the total, which is evidently around 10%.
Top Comment:
That doesn't seem unreasonable to me.
If you break the "shop supply fee" into the oil change and alignment cost, it's a $21 oil change and a $94 alignment, which is very fair.
I'm assuming the shop supply fee probably covers their expense for consumables across the board, such as wheel weights, shop rags, brake parts cleaner, and other small ticket items that would otherwise be a nuisance to bill out.