Demand, Supply, and Markets

The ideas that explain how a market system functions, demand, supply and markets focus on consumer and business behavior. On the demand side, price is an incentive that encourages buyers to want more when low and less when high. On the supply side, with profit as an incentive, a higher price stimulates more production. Through examples, econlife looks at the countless individuals and groups composing the demand and supply sides of markets to see how price and quantity are determined.

  • Henry Ford's Model-T

    Ford Déjà Vu

    Aug 3, 12 • 538 Views • No Comments

    Responding to very different incentives, in 1908 and in 2012 Ford designed a lighter car. The first Model-T had a unique chassis. Made of a steel alloy that no other US car maker used, the Model-T was inexpensive, relatively powerful, sturdy and user......  [read more]

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    Remembering Milton Friedman

    Jul 31, 12 • 616 Views • No Comments

    Split down the middle, opinion about the US economy puts private initiative or government first. Those who place individual enterprise first believe most private income belongs to those who generate it. By contrast, government’s advocates see a......  [read more]

  • Obama/Biden and Romney/Ryan Issues

    Election Economics: Assessing the Minimum Wage

    Jul 30, 12 • 614 Views • No Comments

    Currently at $7.25, should the federal hourly minimum wage rise to $9.80? Proposed legislation from House Democrats would increase the minimum wage in three steps, 85 cents a year for 3 years. After that, the amount would move upward with inflation. Advocates......  [read more]

  • Decisions Have An Opportunity Cost That Require Tradeoffs

    Developing a Soda Habit

    Jul 26, 12 • 538 Views • No Comments

    Why do Brazilians drink Coca-Cola? Our story starts during 1990. Trying to cope with an 80% monthly inflation rate, Brazilian shoppers rushed to supermarkets early in the morning before higher price stickers replaced the old ones. In just one month, a $1......  [read more]

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    Lobster Economics

    Jul 24, 12 • 1005 Views • No Comments

    The year is 2008. Icelandic banks crash. Canadian lobster processors lose their financing. The result? Demand from Canadian processors for Maine’s lobster harvest decreases. Meanwhile, on the supply side, the lobster population is soaring. Conservation......  [read more]