Saturday, February 4, 2012

On an economic supply-demand curve, why is the independent variable on the y-axis and dependent on the x-axis?

On all other mathematical graphs, the independent variable (in the case of a supply-demand curve, this is "price") is plotted on the horizontal x-axis, and the dependent variable (on a supply-demand curve, this is "supply" and "demand") on the vertical y-axis. Other than "That's just the way it is", I'm hoping to find some reasoning behind this. Obviously, it can't be that economists don't understand basic algebra.On an economic supply-demand curve, why is the independent variable on the y-axis and dependent on the x-axis?
This is a good question. In the theories of supply and demand the quantities supplied and demanded are modeled as dependent variables. But in a supply and demand diagram, the supply and demand curves are the graphs of the inverses of these functions.



One way to think about things is to consider the equilibrium price of a good as a variable that depends on both quantity of the good supplied and the quantity of the good demanded.
haven't got a satisfactory answer yet

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On an economic supply-demand curve, why is the independent variable on the y-axis and dependent on the x-axis?
Economists have not bothered to study chemistry as well. Actually ALL economic reactions where wealth changes from one form to another are similar to chemical reactions where matter changes from one form to another. All reactions of wealth are reversible. There is a law in chemistry for reversible chemical reactions. The Law is called Law of Mass Action. If you apply that law, in a reaction involving change of wealth from goods to money, price is the equilibrium constant and price is given by

K= Quantity of money/quantity of goods. If goods increase prices drop and if money increases prices rise. Remember that mere words supply and demand are not forms of wealth.

Regarding price, price can not be a variant because it consists of two forms of wealth i.e. goods and money.

It is my sincere request that economics be redefined as study of nature, properties, composition, laws and classification of wealth.On an economic supply-demand curve, why is the independent variable on the y-axis and dependent on the x-axis?
Your mistake is that you consider price the independent variable and quantity the dependent variable. I agree that at first it's a lot easier to conceptualize as "How many widgets would people buy if the price were X?" but in reality, the two are constantly pushing at each other. Instead, neither is really the independent variable because the question really could be "If I were buying X widgets, how much would I pay for them?"

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