O'Reilly logo

A Primer on Macroeconomics by Thomas Beveridge

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

A New Way to Look at Demand and Supply: Marginal Benefit and Marginal Cost

Before leaving this chapter, let us consider a different way to look at demand and supply analysis. Usually when we look at a demand curve, we read it from the vertical axis (price) to the horizontal axis (quantity demanded), but we could read from quantity to price. The same holds true for a supply curve.

Marginal Benefit

Suppose we ask Adam how much an apple is worth to him—perhaps in an auction context—and we are told 90¢. It is worth this much to him because he is willing to pay 90¢ to get it. Probably, the second apple would be worth less to Adam—perhaps only 80¢. And so on. Each apple’s extra value, or marginal benefit, can be recorded as shown on the diagram and ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required