Supply, Demand, and Equilibrium

Steven E. Landsburg

Chapter 1 in Price Theory and Applications, 2024, pp 1-36 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Many books begin by telling you, at some length, what price theory is. This book begins by showing you. We’ll jump right in, develop some simple tools, and use them to solve some problems.How do air bags cause accidents? What determines the price of beef? When car dealers are taxed, how much of the tax gets “passed on” to buyers through higher prices? Are those buyers better or worse off than if they’d been taxed directly?By the time you’ve finished this chapter, you’ll know how to tackle such questions, and you’ll have a good sense of what price theory is all about. It’s time to dig in.

Keywords: Microeconomics; Price Theory; Supply and Demand; Demand Curve; Adverse Selection; Budget Line; Indifference Curve; Common Property; Competition; Competitive Industry; Constant-cost Industry; Consumer Surplus; Producer Surplus; Social Gain; Social Welfare; Efficiency Criterion; Economic Efficiency; Cost; Price; Deadweight Loss; Price Ceiling; Tariff; Rationing; Quotas; Equimarginal Principle; Price Discrimination; Monopoly; Two-part Pricing; Two-part Tariff; Fishery; Collusion; Income Effect; Substitution Effect; Normal Good; Inferior Good; Giffen Good; Externality; Property Right; Coase Theorem; Transactions Cost; Law of Demand; Marginal Cost; Marginal Revenue; Marginal Value; Market Failure; Moral Hazard; Nash Equilibrium; Normative Criterion; Positive Economics; Oligopoly; Hayek; Social Cost; Economics of Information; Sales Tax (search for similar items in EconPapers)
JEL-codes: D D04 D4 L11 (search for similar items in EconPapers)
Date: 2024
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