Price versus Quantity Demanded:
Due to technical problems, a graph can’t be shown. Consider three products.
Product I represents the aggregate macroeconomy of goods. Elasticity is medium, no extreme in elasticity. There is a maximum quantity demanded, when price goes near zero. With adequate production, the intersection could be reached, especially utilizing presently unused resources. Utilizing unused resources could markedly expand the PPC.
In free markets, history has shown, demand creates supply.
Product II represents a highly inelastic good. As price goes down, the quantity demanded changes little and quickly reaches maximum quantity demanded. An example of this could be a breakfast cereal. There could be a point that even with it ‘free’, only a limited amount is demanded.
Product II represents a highly elastic good. As price goes down, the quantity demanded changes tremendously increases and slowly reaches maximum quantity demanded. These products don’t have intersection near zero price anywhere nearby. An example of this could be gold. Easily found sources of gold could be exhausted on land, so it could be extracted from the oceans and then the sky. The moon and near earth asteroids contain trillions of tons of gold. Then, the value of gold is about $10,000 per pound. The cost of mining gold from the moon is about $15,000 per pound and mining asteroids is about $25,000 per pound. Mining these sources could make gold ridiculously abundant. Then zero is reached.
The utopia system operates by market demand. It is a fulfillment of ‘normative' economics. What should be produced, by the market demand, will be produced. Demand creates supply.
Back to Homepage
Back to Discussion Page