Economists usually see Alfred Marshall as the originator of standard demand and supply diagrams and their use in economic analysis including welfare applications and consumer surplus. However, it turns out that Marshall’s diagram was not the first use of demand and supply curves. Cournot originates a scissors type diagram to illustrate tax incidence in 1838 that has a demand and a supply curve with price on the horizontal axis and quantity on the vertical axis. Indeed, at least five economists used similar tools before Marshall published it – Antoine Cournot (1838), Karl Rau (1841), Jules Dupuit (1844), Hans Von Mangoldt (1863) and Fleeming Jenkin (1870). According to Humphrey (1992), these individuals were largely unaware of the others work.
Sunday, March 8, 2015
History of supply & demand
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