Off Topic — HabitableZone

Off Topic » in reply to Favorite newspaper headline today

Not surprising.

Anyone who took Econ 101 should take offense that the media can't distinguish between a drop in the 'quantity demanded' and an actual decrease in demand.

A drop in demand means a leftward shift in the entire demand curve. Less is demanded for each price point.

An increase in demand:

http://www.netmba.com/images/econ/micro/demand/curve/demandshift.gif


One thing that can cause an actual drop in demand is an increase in the availability, or a reduction in the price of, substitutes.

I've read that a good percentage of small businesses in China are powered by small gasoline generators. When Three Gorges Dam and associated infrastructure comes on line, the Chinese will be able to turn off some of the generators and this will be a true decrease in demand, however small.

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