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[GavJ]

And that's not how price works either. I'm glad we've established how uninformative this tangent is from all angles.

Again, moving on, please. Thread has clearly run its course.

[WoobMonkey]

3. This isn't the Smartass Olympics.

Spoiler: Guess this isn't as relevant as I thought, then (click to show/hide)

[Matt_S]

And that's not how price works either. I'm glad we've established how uninformative this tangent is from all angles.

Again, moving on, please. Thread has clearly run its course.

That's exactly how prices work. The person selling the goods decides how much they'll sell them for.  And the same person can decide to change the price depending on market conditions.  Since they're free to change it, it's an independent variable.

3. This isn't the Smartass Olympics.

Spoiler: Guess this isn't as relevant as I thought, then (click to show/hide)

It amazes me how you guys get these on such short notice.

[Playergamer]

Price is set by the owner of the item, not market conditions. Market conditions can, however, effect how someone prices things.

This thread never had a course Gav.

[GavJ]

Sigh. Okay, if you insist:

* Yes, you physically CAN ask any price.
* You also physically CAN stab the customer and take everything in their wallet.
* You also physically CAN wait until a clerk goes to the bathroom, stand behind the till, and pretend everything is your merchandise and offer 50% off impromptu sales
* You also physically CAN blackmail everybody who competes with you in town and then charge twice as much as them but still make them suggest you for referrals.
* You also physically CAN find a new religion and suddenly give everything for free to the first person with blonde hair you see.

Economic graphs are not graphs of any of these things. They are graphs of what people actually do in actual normal market situations where people are acting lawfully and rationally. And in such situations, prices are in fact predictably constrained and depdendent upon tons of things. So is demand. So is quantity supplied. All of these things also influence other things in predictable ways. They are both dependent and independent (and not just in niche cases. They are both constantly). Markets are non-linear dynamic systems.

[Matt_S]

Sigh. Okay, if you insist:

* Yes, you physically CAN ask any price.
* You also physically CAN stab the customer and take everything in their wallet.
* You also physically CAN wait until a clerk goes to the bathroom, stand behind the till, and pretend everything is your merchandise and offer 50% off impromptu sales
* You also physically CAN blackmail everybody who competes with you in town and then charge twice as much as them but still make them suggest you for referrals.

Wait I said this WASN'T the Olympics.

Economic graphs are not graphs of any of these things. They are graphs of what people actually do in actual normal market situations where people are acting lawfully and rationally. And in such situations, prices are in fact predictably constrained and depdendent upon tons of things. So is demand. So is quantity supplied. All of these things also influence other things in predictable ways. They are both dependent and independent (and not just in niche cases. They are both constantly). Markets are non-linear dynamic systems.

And yet demand curves are the demand at any given asking price, regardless of what you think they should be.

[GavJ]

And yet demand curves are the demand at any given asking price, regardless of what you think they should be.

Yup. They are also the price at any given demand, regardless of what you think they should be. So?

[Matt_S]

And yet demand curves are the demand at any given asking price, regardless of what you think they should be.

Yup. They are also the price at any given demand, regardless of what you think they should be. So?

Today on Bay12 I learned that functions can sometimes be inverted.

The graphs we're talking about define demand as a function of price.

[GavJ]

Jim has diabetes.
Jim demands exactly 20ccs of insulin a day, period.
Jim's price-demand curve is a straight vertical line, which clearly demonstrates price-demand curves are not normal ordered function graphs, since such a curve is non-monotonic.

They are correlative plots. They just plot how the two variables correlate together at different values. Neither really has any sort of privileged position.

It's just like the graphs you see at the doctor that plot height and weight. They are merely depicting their correlation. There is no function (they might fit one, but there isn't an actual underlying one), and neither is dependent nor independent.

[Matt_S]

Jim has diabetes.
Jim demands exactly 20ccs of insulin a day, period.
Jim's price-demand curve is a straight vertical line, which clearly demonstrates price-demand curves are not normal ordered function graphs, since such a curve is non-monotonic.

They are correlative plots. They just plot how the two variables correlate together at different values. Neither really has a privileged position.

Once again, that's not what demand means in economics.  It's okay to use different definitions for your own terms, but that's not what "demand" is on the demand curves that other people produce.

[GavJ]

Jim has diabetes.
Jim demands exactly 20ccs of insulin a day, period.
Jim's price-demand curve is a straight vertical line, which clearly demonstrates price-demand curves are not normal ordered function graphs, since such a curve is non-monotonic.

They are correlative plots. They just plot how the two variables correlate together at different values. Neither really has a privileged position.

Once again, that's not what demand means in economics.  It's okay to use different definitions for your own terms, but that's not what "demand" is on the demand curves that other people produce.

Orly?

http://en.wikipedia.org/wiki/Price_elasticity_of_demand

Note in particular "perfectly inelastic demand" which is precisely what I'm talking about, such as demand for insulin, and which is depicted as a straight vertical line that would be illegal as a graph of a normal ordered function.

[Matt_S]

Jim has diabetes.
Jim demands exactly 20ccs of insulin a day, period.
Jim's price-demand curve is a straight vertical line, which clearly demonstrates price-demand curves are not normal ordered function graphs, since such a curve is non-monotonic.

They are correlative plots. They just plot how the two variables correlate together at different values. Neither really has a privileged position.

Once again, that's not what demand means in economics.  It's okay to use different definitions for your own terms, but that's not what "demand" is on the demand curves that other people produce.

Orly?

http://en.wikipedia.org/wiki/Price_elasticity_of_demand

Note in particular "perfectly inelastic demand" which is precisely what I'm talking about, such as demand for insulin, and which is depicted as a straight vertical line that would be illegal as a graph of a normal ordered function.

What I mean is saying that someone demands something isn't the same thing as economic demand.  And secondly, a straight vertical line would be a perfectly legal function if demand were a function of price.

[GavJ]

http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=perfectly+inelastic

A fun quote from this economics encyclopedia:

PERFECTLY INELASTIC:
An elasticity alternative in which changes in one variable (usually price) do NOT cause any changes in another variable (usually quantity). Quantity is totally, completely unresponsive to price. Quantity just does not change, regardless of changes in price.

I think their opinion on whether demand is dependent upon price is made abundantly clear in the language above...

[GavJ]

And secondly, a straight vertical line would be a perfectly legal function if demand were a function of price.

*Shrug*

You can have perfectly horizontal lines too.  It's called perfectly elastic demand...

[Matt_S]

http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=perfectly+inelastic

A fun quote from this economics encyclopedia:

PERFECTLY INELASTIC:
An elasticity alternative in which changes in one variable (usually price) do NOT cause any changes in another variable (usually quantity). Quantity is totally, completely unresponsive to price. Quantity just does not change, regardless of changes in price.

I think their opinion on whether demand is dependent upon price is made abundantly clear in the language above...

That's what we in mathematics call a "constant function."  It doesn't mean the one variable is any less of a function of the other.

And secondly, a straight vertical line would be a perfectly legal function if demand were a function of price.

*Shrug*

You can have perfectly horizontal lines too.  It's called perfectly elastic demand...

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.