Supply-demand curves are a can of worms. Once you start constructing them from first principles you start realizing just how spherical the Econ 101 spherical cows are. They model almost nothing interesting.
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I think they’re actually so fundamentally important that we don’t see them. I agree that directly modeling prices using them@rarely works, but the idea that people will pay more for something they want more, and that rarer things that people want will cost more, is everywhere.
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This seems almost absurdly wrong to me, though I can see how you might think that if you're looking at the derivation in MWG. Try Vernon Smith's stuff for a more intuitive framework: jstor.org/stable/1861810
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