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Message: <blockquote data-quote="Umbran" data-source="post: 6154342" data-attributes="member: 177">I hope, on a gaming board, it is okay if I get picky and pedantic on models and math.  But that's not what supply and demand curves are.  In fact, what you seem to be doing is describing the Demand curve twice.  Please allow me to correct you.Imagine a graph.  On one axis (typically the X-axis) is Quantity, the number of units of an item.  On the other axis (typically the Y-axis) is the price at which each unit sells.One line on the graph is Supply.  This line answers the question, "For a given price per unit, how many units is the supplier willing/able to produce?"  Generally speaking, the higher the price per unit, the more units the supplier will want to provide - largely because they'll be getting a higher profit per unit.  The Supply curve generally slopes upwards.Another line on the graph is Demand.  This line answers the question, "For a given price per unit, how many units is the market willing/able to buy?"  Generally speaking, the lower the price per unit, the more units the market will want to buy.  Duh.  The Demand curve generally slopes downward.Where the two lines cross (IF they cross) you find the optimum quantity to produce and price to sell - maximizing profit and minimizing waste.  It is *unlikely* for there to not be an economy, but not impossible.  As I noted above, the Supply and Demand curves do not *have* to cross.  For example, it may be that the basic costs of production exceed the market's ability to pay.  For example, if it cost a million dollars per pound to lift satellites into orbit, not even governments would pay the price, and there would be no market for the service.  This does not mean that a sale cannot be made - what it means is that each and every production and sale would be a one-off, rather than a statistically predictable thing.  The supply and demand curves are large-scale, statistical things, and it falls apart when the number of sales is low enough that you cannot perform valid statistics.</blockquote>

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