Supply & Demand Theories

4 April 2015
Basic views of Adam Smith, Thomas Malthus, David Ricardo, Jean Baptiste Say, Keynes & others on pricing, costs, profits.

At its most basic, economics is a descriptive tool for illustrating the relationship between price and quantity. In this fundamental form, economics neither offers solutions for solving inequality in distribution, nor does it identify a single best method for settling on how goods should be distributed in the first place. Instead, it identifies the relationship between the price of something, and the quantity of that something that is supplied and demanded. Since Adam Smith, economists have taken on the task of doing more than simply describing this relationship; instead, they have sought to maximize the benefit to one or another participants in the economy. The result is that large resources have been put to understanding how the price of a good is related to the profit of that good, or the rent associated with the good.
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