The Supply Curve Does Not Generally Exist: So Why is it a Core Concept in Intro Economics Courses?

Updated: May 7, 2019

I frequently start a class discussion of “Supply and Demand” with a simple question to anyone in the class. If you were a pizza producer, how many pizzas would you produce at a price of $15 a pie? Students give me a blank stare. I then elaborate. Consumers will have some idea of how many pizzas they will buy at any given price, assuming other “shift factors” like income, taste, and expectations do not markedly change, but producers can estimate how much they will produce at any given price only if they know something about demand conditions. Demand, however, is not a shift factor for the supply curve. Quite the contrary. The supply curve of introductory economics textbooks is supposed to be completely independent of demand. Demand is supposed to have no influence on the position or shape of the supply curve.

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The Profound Implications of Continuing to Teach 'Supply and Demand' Instead of 'Demand and Cost' in Intro Economics Courses - an Unequal Exchange Application