tag:blogger.com,1999:blog-5698599151422542939.post7557665341173928343..comments2023-09-21T05:14:00.254-04:00Comments on Euvoluntary Exchange: I will alwaaaaaaaaaaaays looooooove yoooooooouMungowitzhttp://www.blogger.com/profile/02340064320347875601noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5698599151422542939.post-38952798561436401442012-02-23T17:48:47.644-05:002012-02-23T17:48:47.644-05:00We gonna argue elasticities, bro? No, the real iss...We gonna argue elasticities, bro? No, the real issue is monopoly or competition.<br /><br />Supposing the supply curve is perfectly elastic, in the competitive case, the price shouldn't go up. But that's special behavior. In the monopoly case, we have to think about the demand side more (and marginal revenue).<br /><br />To tell an Econ 101 story, we'd say that peoples' preferences have changed exogenously, and demand has increased. If you draw this out, we get something like this: http://cl.ly/ETkx<br /><br />Note that the price ought to go up in response to an increase in demand, whether we're talking about the theory of a market supply or a monopolist seller. The only difference we should observe between the competitive case and the monopolistic case are the differences in price and quantity, not a change in how the price mechanism operates in response to a change.<br /><br />So as usual, the economist can't condemn a business for raising price, but customers have every interest in doing so in their everlong war over surplus.Anonymoushttps://www.blogger.com/profile/16153702750268298333noreply@blogger.comtag:blogger.com,1999:blog-5698599151422542939.post-74195975405332151312012-02-15T22:16:36.810-05:002012-02-15T22:16:36.810-05:00Maybe, but this is more of a demand shock story th...Maybe, but this is more of a demand shock story than a monopoly producer story, I think.Samuel Wilsonhttps://www.blogger.com/profile/16635024719984640919noreply@blogger.comtag:blogger.com,1999:blog-5698599151422542939.post-29330742175006305342012-02-15T20:22:46.473-05:002012-02-15T20:22:46.473-05:00Copyright=monopoly=bad pricingCopyright=monopoly=bad pricingAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5698599151422542939.post-30682939242260852632012-02-15T09:45:30.540-05:002012-02-15T09:45:30.540-05:00I think that should be "unexpected"I think that should be "unexpected"Anonymoushttps://www.blogger.com/profile/07675280324246893316noreply@blogger.com