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anonymous

  • 5 years ago

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

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  1. amistre64
    • 5 years ago
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    lol.... becasue most people are slewed ;)

  2. amistre64
    • 5 years ago
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    skewed... ruined a perfectly good bit with a typo...

  3. amistre64
    • 5 years ago
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    the economies of scale is a good reason; it is not linear and it affects supply and demand

  4. amistre64
    • 5 years ago
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    keynesian economics says that the supply curve is linear and then bends up at the Nrgdp

  5. anonymous
    • 5 years ago
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    Linear with respect to what?

  6. amistre64
    • 5 years ago
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    linear with respect to supply and demand :)

  7. amistre64
    • 5 years ago
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    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

  8. amistre64
    • 5 years ago
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    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

  9. amistre64
    • 5 years ago
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    there can also be a max or min at which the curves turn back on themselves and its refered to as laffers curve

  10. anonymous
    • 5 years ago
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    Laffers curve refers to tax revenue rates.

  11. amistre64
    • 5 years ago
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    tax rates follow a laffer curve; but laffers curve is a generality of many circumstances

  12. anonymous
    • 5 years ago
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    Explain how it relates to supply, demand, and price.

  13. amistre64
    • 5 years ago
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    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

  14. anonymous
    • 5 years ago
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    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%?

  15. amistre64
    • 5 years ago
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    laffers curve is a description of human behavioural outputs given circumstances; it isnt a set in stone device ..

  16. amistre64
    • 5 years ago
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    tax rates are a model of laffers curve; not the result of it.... casue and effect..cause and effect

  17. anonymous
    • 5 years ago
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    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.

  18. amistre64
    • 5 years ago
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    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

  19. amistre64
    • 5 years ago
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    laffers curve demonstrates the human behaviour is not linear lol

  20. anonymous
    • 5 years ago
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    I'm trying to figure out anything remotely close to linear with respect to supply, demand, and price.

  21. amistre64
    • 5 years ago
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    the natural Rgdp is a vertical line in the long run supply curve ;)

  22. anonymous
    • 5 years ago
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    Rgdp is not familiar to me.

  23. amistre64
    • 5 years ago
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    the supply curve modeled by keynesian is horizontal at points to indicate the inelasticity of price to drop

  24. amistre64
    • 5 years ago
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    real gross domestic production

  25. amistre64
    • 5 years ago
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    at natural Rgdp you are producing as much as you can with the resources available...

  26. amistre64
    • 5 years ago
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    supply can only be a vertical representation then; the short run supply curve is skewed, but eventually settles into the long run

  27. amistre64
    • 5 years ago
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    if we are producing/supplying all we can ; then a raise in price doesnt equal a raise in supply ..

  28. amistre64
    • 5 years ago
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    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...

  29. anonymous
    • 5 years ago
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    This is a math forum. A vertical line approached asymptotically does not make the function that approaches it linear. Anything but.

  30. amistre64
    • 5 years ago
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    a vertical line is a line lol; its called x = Nrgdp

  31. amistre64
    • 5 years ago
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    the slope of the line is undefined; but the line exists

  32. anonymous
    • 5 years ago
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    Not all lines represent linear functions. This one doesn't.

  33. amistre64
    • 5 years ago
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    well, if we want to get technical about the term 'function' then id have to agree ;)

  34. anonymous
    • 5 years ago
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    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.

  35. anonymous
    • 5 years ago
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    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.

  36. amistre64
    • 5 years ago
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    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.

  37. amistre64
    • 5 years ago
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    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

  38. anonymous
    • 5 years ago
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    Do you teach economics somewhere? You spelling suggests you are not in the United States.

  39. amistre64
    • 5 years ago
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    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

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