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demand curve |
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demand curve
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Just as a ppm equates marginal revenue (MR) and marginal cost (MC) to determine the optimal quantity of output to produce, and finds the maximum price consumers are willing to pay by noting the price on its demand schedule corresponding to that quantity, a rpm equates marginal revenue product ( Clearly the use of the ordinary demand schedule will bias the true welfare loss derived from the compensated demand schedule. As the right panel shows, the price of a Treasury security must satisfy the ultimate holders of securities (pension funds, insurance companies, mutual funds, and the general investing public), seen as the intersection of their downwardly sloped demand schedule with the vertical Treasury supply schedule. |
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