Comment Re:He is largely correct (Score 1) 47
There are two curves, a supply curve and a demand curve. Where they cross is the price.
This is extremely simplified
In general: the price is as high as the seller can get away with. "Supply and Demand" as "basic economics" only works in niche cases.
Where the curves cross is the highest profit the seller can get away with. This is precisely how the curves are defined.
When talking about supply and demand, people commonly misunderstand that both curves are fundamentally about price, not availability or desirability. The supply curve is "How much is available at each price level". The demand curve is "How much will be bought at each price level". At prices above or below the intersection point, sellers are failing to maximize their profit.
It's profit-maximization that pushes prices to the supply/demand intersection point.
Note that monopoly or monopsony don't invalidate the supply/demand curves, they just alter them. Even with a perfect monopoly, the supply and demand curves still exist; at different price levels the monopolist can obtain more or less to sell, and at different price levels the buyers will purchase more or less. Supply and demand curves don't work or not work in different market conditions. Supply and demand curves always hold, non-competitive market conditions just shift the curves. Even government price setting doesn't change this fundamental reality... it makes price ranges legally inaccessible, which just alters the curve shapes by adding legal risk to the "price".
Supply/demand curves aren't a prediction, they're an observation, and the basic concept is near-tautological.