Demand, Supply And Fairness

Economics is all about supply and demand. Textbooks are full of examples of these two balancing each other out. However there is a third factor that is forgotten. That is fairness. People are guided by how fair they think something is or is not. Businesses often don’t raise their prices even when demand rises because it is seen as being unfair. Similarly customers often resent higher prices if they feel there is no justification for it. Economists obey the laws of supply and demand, sometimes ordinary people don’t. Continue reading “Demand, Supply And Fairness”