Rethinking the Geometry of the Demand and Supply Functions

Saidou Baba Oumar

Romanian Economic Journal, 2019, vol. 22, issue 74, 14-39

Abstract: This paper attempts to revisit the geometry of the demand and supply functions in economic analysis, taking mathematical exigencies into account. Leaning on the fundamental principles that guide the theory of demand and supply, the paper uses the analytical approach of data analysis to address the objectives of the investigation. Results of the study indicate that whether expressed in the standard mathematical form (Quantity-price relation) or casual mathematical form (Price-quantity relation), the demand and supply functions obey the laws of demand and supply. Also, the results reveal that the first component in the computation of the price-elasticity remains unchanged and takes into account the quantity-price relationship, irrespective of the functional form (Quantity-price function or price-quantity function) used in defining the demand and supply functions. Furthermore, the results show that the consumer and producer surpluses can still be evaluated without violating mathematical requirements with the quantity-price relation model of describing the demand and supply functions to accommodate welfare issues associated with the demand and supply concepts. As a result, it is suggested that mathematical requirements of logic, rigor, consistency, and objectivity be strictly respected when subjecting the analysis of real world economic phenomena to mathematical treatments.

Keywords: consumer; Elasticity; Price; Producer; Surplus (search for similar items in EconPapers)
JEL-codes: D01 D11 D20 I30 (search for similar items in EconPapers)
Date: 2019
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.rejournal.eu/sites/rejournal.versatech. ... 2saidoubabaoumar.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:22:y:2019:i:74:p:14-39

Access Statistics for this article

Romanian Economic Journal is currently edited by Ioan Popa, PhD

More articles in Romanian Economic Journal from Department of International Business and Economics from the Academy of Economic Studies Bucharest Contact information at EDIRC.
Bibliographic data for series maintained by Radu Lupu ().