Message from @Sophie
Discord ID: 685164027399110677
And making bad assumptions about the shape of the curve
The shape is irrelevant, the point on the curve where PMAX is - is below the equilibrium
That causes shortages - it doesn’t matter if it’s a vaccine or a laser gun
That’s not correct
If a consumer is permanently removed from demand after ANY consumption, it changes your assumptions about the curve
You’re imagining a scenario in which there is indefinite demand in the long term
But if someone receives a vaccine tomorrow, they’re no longer generating demand, forever
You can’t compare it to other drugs, you can’t compare it to food, you can’t compare it to laser guns
You have to live in reality sometimes
Normally you’d talk about this as extremely inelastic demand
BUT
Because someone is REMOVED FROM THE DEMAND CURVE when they consume
The demand curve jumps to the left every time there’s consumption
So what actually happens is that without price controls, you’re only fulfilling part of the NEED even if you’re fulfilling equilibrium demand
But with price controls, you fulfill 100% of need
I don’t know how to say this without sounding condescending, so I’ll just say it
Sincerely; if you don’t understand, please go ask an economics professor
You’re still in school right? Just go ask one about the demand curve of vaccines
Of truly single use consumption goods
With low variable cost
You can think of it as the inverse of a monopolistic pricing model actually- production will go till supply equals demand, non marginal
But that’s just a quirk
It doesn’t matter if it’s a “one time good”. It’s consumed over years, not at once. So demand curve is not effectively shifting but it is on equilibrium. This means a price cap will still cause shortages.
The equilibrium price is where shortages doesn’t occur, that means need is filled
@Sophie this is introductionary economics...
Except that it’s consumed at once, not over years.
Obviously yes it matters if it’s a one time use good.
Yes it’s introductory economics. If you had gotten further in economics the actual nuances of s/d would be explained to you
Sincerely, ask a professor.
I know you haven’t finished your degree
Everyone doesn’t buy the vaccine in one day. It’s over years and by different individuals and institutions.
First of all, no.
We’re talking about weeks, not years
Secondly, it doesn’t matter.
Standard s/d curves assume a RATE of market consumption
Here we have the rate changing as people drop out of demand after consumption
Vaccines won’t be finished in weeks, it’s buying time is over years
Like, just ground yourself in reality for a second
Right, the vaccine will be finished in about 18 months
Then the buying time is weeks