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[GavJ]

And this is why I think perfectly elastic demand plots are ill-defined.  It doesn't allow any change in price even though someone could clearly sell the good at a different rpice.

Oh no no no no no.
I agreed that you can SET your price at any level you want. I absolutely do not agree that you can SELL a good at any price you want. That's clearly not true. A sale requires an agreeing buyer and seller.

Imagine three merchants right next to each other in a bazaar, selling fungible, nonperishable goods (e.g. dry rice that all comes from the same farmer). They are all forced to sell at exactly the lowest possible price that nets them a quantum unit (e.g. a penny in a cash market) of profit, given their identical costs and overhead. They will not ever sell lower, if rational. They will not ever sell higher, because people will buy exclusively from their neighbors.

Thus, horizontally constrained line.

[Matt_S]

And this is why I think perfectly elastic demand plots are ill-defined.  It doesn't allow any change in price even though someone could clearly sell the good at a different rpice.

Oh no no no no no.
I agreed that you can SET your price at any level you want. I absolutely do not agree that you can SELL a good at any price you want. That's clearly not true. A sale requires an agreeing buyer and seller.

The amount of that good that you can sell at that price is what defines the demand, so you're saying that the demand at a given price can be zero.

Imagine three merchants right next to each other in a bazaar, selling fungible, nonperishable goods (e.g. dry rice that all comes from the same farmer). They are all forced to sell at exactly the lowest possible price that nets them a quantum unit (e.g. a penny in a cash market) of profit, given their identical costs and overhead. They will not ever sell lower, if rational. They will not ever sell higher, because people will buy exclusively from their neighbors.

Thus, horizontally constrained line.

Besides the fact that real life clearly disagrees with this example, finite availability of the goods means that someone else can sell at a higher price, but they'll only get the customers who couldn't get the cheaper goods, which yes, might be zero depending on the conditions, but it might also be non-zero.

[GavJ]

The real nail in the coffin though is that you can even have graphs that turn back on themselves or have areas swept out and not just lines, or all manner of other shenanigans, in special circumstances.

For example, actual effective taxi fares amongst people who are in too much of a hurry to wait for change will have weird, non-line area shapes on such a graph, because they will depend on randomly varying factors like "what types of bills customers happened to have in their pockets at the time." And these would even be lawfully predictable, based on bill carrying statistics, despite making absolutely no sense as an ordered function.

Yet makes absolutely perfect sense when you treat it like what it is: a correlation plot of pairs of observed or predictable values. Not a function.

[Matt_S]

The real nail in the coffin though is that you can even have graphs that turn back on themselves or have areas swept out and not just lines, or all manner of other shenanigans, in special circumstances.

For example, actual effective taxi fares amongst people who are in too much of a hurry to wait for change will have weird, non-line area shapes on such a graph, because they will depend on randomly varying factors like "what types of bills customers happened to have in their pockets at the time." And these would even be lawfully predictable, based on bill carrying statistics, despite making absolutely no sense as an ordered function.

Yet makes absolutely perfect sense when you treat it like what it is: a correlation plot of pairs of observed or predictable values. Not a function.

It also makes perfect sense when you treat it like demand as a function of price for a fixed set of conditions.

[GavJ]

The real nail in the coffin though is that you can even have graphs that turn back on themselves or have areas swept out and not just lines, or all manner of other shenanigans, in special circumstances.

For example, actual effective taxi fares amongst people who are in too much of a hurry to wait for change will have weird, non-line area shapes on such a graph, because they will depend on randomly varying factors like "what types of bills customers happened to have in their pockets at the time." And these would even be lawfully predictable, based on bill carrying statistics, despite making absolutely no sense as an ordered function.

Yet makes absolutely perfect sense when you treat it like what it is: a correlation plot of pairs of observed or predictable values. Not a function.

It also makes perfect sense when you treat it like demand as a function of price for a fixed set of conditions.

Yes I agree. If you define a new type of conditional graph designed to make the answer you want true, then you'll get the answer you want.

I'm talking about NON-conditional, all price, all demand curves, for the whole industry (I don't have to specify only those types of customers, anything greater than 0% of them averaged in will still achieve all I need), i.e. what we've been talking about this whole time... will have non-function-compliant areas swept out in them, not proper lines.

[Matt_S]

The real nail in the coffin though is that you can even have graphs that turn back on themselves or have areas swept out and not just lines, or all manner of other shenanigans, in special circumstances.

For example, actual effective taxi fares amongst people who are in too much of a hurry to wait for change will have weird, non-line area shapes on such a graph, because they will depend on randomly varying factors like "what types of bills customers happened to have in their pockets at the time." And these would even be lawfully predictable, based on bill carrying statistics, despite making absolutely no sense as an ordered function.

Yet makes absolutely perfect sense when you treat it like what it is: a correlation plot of pairs of observed or predictable values. Not a function.

It also makes perfect sense when you treat it like demand as a function of price for a fixed set of conditions.

Yes I agree. If you define a new type of conditional graph designed to make the answer you want true, then you'll get the answer you want.

Which is why picking smart definitions is very valuable.  But I can't take credit for these definitions because economists came up with them first.

I'm talking about NON-conditional, all price, all demand curves, for the whole industry (I don't have to specify only those types of customers, anything greater than 0% of them averaged in will still achieve all I need), i.e. what we've been talking about this whole time... will have non-function-compliant areas swept out in them, not proper lines.

Key word being "curves".  As in multiple curves.

[GavJ]

...? The definition of price that economists came up with includes my example of variable taxi fares, since it is defined as the actual exchange of assets that takes place.

[Matt_S]

...? The definition of price that economists came up with includes my example of variable taxi fares, since it is defined as the actual exchange of assets that takes place.

And since the circumstances differ, these prices lie on different demand curves.

I'm officially abandoning this thread since it keeps distracting me from my job.

[GavJ]

The hell are you talking about? You don't draw a separate curve every time any little variable changes! Economists can and do draw demand curves for entire industries, all the time. Can you name a single industry that has identical circumstances in every way across every situation? Neither can I. Yet they draw the curves anyway.

That's because they're not functions, and so niggly little details changing between each transaction don't invalidate anything at all. Unlike a function, you don't NEED to control all other variables. You're merely reporting correlations of numbers that actually happened or typically happen. You simply add consumers all up and you get your industry graph, the end.

If they tried to treat it as a function, they'd be paralyzed based on exactly what you're saying - each customer's individual purchase would have to have a separate graph, rendering them utterly useless. The fact that this is not what happens is just yet another piece of evidence that they aren't function graphs.





And when you average a bunch of individual circumstances that have swept out areas instead of a curve, you still get areas. Then when you add a bunch of consumers' average areas together, you still get summed areas.

[Toady One]

Hmm...  so in conclusion, we'll go with classically defined learning curves and colloquially defined demand curves.

I should lock this before somebody gets into too much trouble with words.