Well, a week off. Due the inability of our family to make a definite decision in a reasonable amount of time, we waited until low rates for airlines and such had passed (and the time is somewhat fixed by this being the week of spring break). Our first choice had been to go to Sante Fe for the break. But instead we are driving to St. Louis for the week, in part just to get away we a have no clue what we are doing. Any suggestions of “things to do” in the St. Louis area would be appreciated.
On the drive, I read one of the “econ” books recommended/linked Friday (I think). It was purported to give an overview of economics. Anyhow, I have a question for those who might have a more substantial background in economics. In the micro-economics section they show a plot of supply/demand curves. These curves plotting price and quantity (if I remember correctly). The slope at the intersection points seem to be termed “elasticity”. What also seems to be assumed is that these curves are monotonic, smooth, and well behaved. These assumptions however do not seem to be realistic. An example of non-monotonic behavior would be the assumption that if a price there will be higher demand or that more of a thing will be sold. But product that prides itself on being “high quality” will not necessarily sell at a lower price because that lower price nobody would believe that high quality would be possible. High price can also signal elite/elitist products. These products would not sell more, their cachet is in part inseparable from their high price.
So here’s my question. Are these curves assumed to be mathematically well behaved in these ways. If they are not, what breaks done in their models?