Price versus Quantity Demanded:
Due
to technical problems, a graph can’t be shown. Consider three products.
Product I
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
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 III
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.
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