For sure on a page in a textbook in a classroom of first
semester Economics, a price will emerge where the supply and demand curves
intersect. But I assert that, while that is the tendency, real life scenarios
complicate that overly simplified mantra.
Last night while Sherry and I were having dinner at a local
restaurant, positioned across from the toll road exit, we were two of ten
customers in the establishment. The waitstaff approached with a menu. We
considered options, checked the prices, and placed our order.
Shortly after our food arrived at our table we learned, from
casual conversation with staff, that a bus of approximately one hundred people would soon arrive.
And they did so.
The bus pulled in from the toll road, the passengers unloaded
and filled the chairs in the restaurant.
I was very happy for the restaurant and the staff who would
have a great night of tips.
But and this relates to the “supply and demand”
misconception…
Though demand had increased from ten customers to about one
hundred and ten, the menu prices remained static, unchanged.
It may seem like a minor blip in the generalization of supply
and demand, but I assert that such contrarieties happen consistently throughout
the economy such that the “supply and demand” economic mantra is less an
economic law and more of a “perfect world” aspiration.
