Law of supply and demand

The economics of acetone production and its consequent market position are unusual. Traditional laws of supply and demand cannot be appHed because supply depends on the production of phenol and demand is controUed by the uses of acetone. Therefore, coproduct acetone from the cumene to phenol process will continue to dominate market supply. DeHberate production of acetone from isopropyl alcohol accommodates demand in excess of that suppHed by the phenol process. More than 75% of world and 90% of U.S. production comes from the cumene to phenol process. 

In economics, the law of supply and demand is similar to Le Chatelier s principle. When the price of a commodity, such as the price of a kilogram of apples, is constant, the market for the commodity is at equilibrium. If the supply of the commodity falls, the equilibrium is changed. The market adjusts by increasing the price, which tends to increase the supply. 

Figure 9.22 The relationship between ATP utilisation by myosin ATPase and ATP generation by Krebs cycle and electron transfer. This relationship between the two major energy systems in muscle is critical. The rate of the cycle and electron transfer is controlled, in part, by ATP utilisation by muscle contraction (see below). This is equivalent to a market economy so that the law of supply and demand applies. The greater the demand and hence the use of ATP, the greater is the rate of generation.

The nickel price is the promoting factor for the decision to change the traditional process to a process like the one proposed. Since the nickel price is elevated and is subject to modifications according to the law of supply and demand, it is therefore a very volatile price. 

Basic economics The law of supply and demand is fundamental to an understanding of... 

No, we didn t. Some of us were paid as research associates or faculty members. We had a little bit of a budget to buy equipment and so forth. This was before the era of research proposals. The discovery of plutonium, for example, was personal research. It was not supported by the government or any other research foundation. Support is easier today. However, it is more difficult for young scientists today to find a position. There is a little oversupply of scientists in both chemistry and physics. However, we have been through that before, and it s the law of supply and demand sort of adjustment and takes care of itself. 

In addition, the methodology recognizes a key difference between the economics of commodities and specialty products that is easily overlooked. There is little risk that a commodity chemical manufactined by a new manufacturer or plant will go unsold if it is priced comparable to the competition. This is because manufacturers are generally imable to differentiate their commodity products from those of their competitors if they are priced the same, and so by the laws of supply and demand, any small increase in supply will lead to a small decrease in price for all manufacturers of the commodity as the market absorbs all the commodity produced by the new manufacturer. As all of the commodity manufactured at a new plant will sell at this new market price, the primary business decision is whether the investment in a new plant is justified by its return. 

Xenophon is mostly remembered today as the author of the Anabasis, where he records the story of the 10 000 Greek soldiers from Cyrus s army that he led back home after the unsuccessful war with Artaxerxes. However, he has other calls on onr attention, the most relevant to this book being that he wrote the Oeconomicus, probably the world s first textbook of economics. It contains ideas that formed the basis, more than 2000 years later, of the first serious attempt to analyze economic phenomena, which was made by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations. Xenophon noted that there is a relation between the number of blacksmiths in a region and the prices that they can charge if there are too many, the price of their work falls, causing some to go out of business and helping to restore the value of the work of those that remain. This is effectively the first expression of what we now call the law of supply and demand. 

However, no observer of modem economic systems can fail to be struck by the fact that economic laws do not seem to work very well. This is in part due to the tendency of govermnents to think that the laws do not apply to them and that they can manipulate them for their own purposes. We shall examine other possible explanations at the end of the chapter. Meanwhile we need to look at a domain in which the laws of supply and demand work supremely well, namely the organization of metabolism in a healthy organism. This is an aspect of metabolism that has interested me for a long time, and in the past 15 years or so I have been working with Jannie Hofineyr, a biochemist in Stellenbosch, South Africa, to explore the relationships between economics and metabolism. Our aim has been to develop a modem theory of metabolic regulation that pays proper attention to ideas of supply and demand. 

Before continuing, we need to ask whether we are really entitled to attribute the existence of feedback regulation in metabolism to natural selection. Maybe it is just an inevitable consequence of the organization of metabolism into series of linked reactions, like some other properties mistakenly attributed to natural selection that we discussed in Chapters 8 and 9. To decide this we should compare metabolism with other flow systems found in nature or engineering. In natural river systems, for example, there is no law of supply and demand. The existence of a drought around the lower reaches of a river does not cause the tributaries at the higher levels to flow any faster the existence of a flood does not make the snow melt more slowly in the mountains. On the contrary, a river is a water delivery system that is completely indifferent to the needs of the plants and animals that live at the lower levels. 

What about artificial water supply systems Maybe just enclosing the flow from reservoir to final user in watertight pipes is sufficient to ensure that the laws of supply and demand will apply. We can imagine a pipe leading from a reservoir situated in the hills 1000 m above the user, open at the level of the reservoir but terminated by a tap at the level of the user. Opening the tap will make the water flow closing it will make it stop. Not only that, but we can obtain a less-than-maximal flow by opening the tap only partially. 

The questions of whether principles are trae or not, what it would mean for them to be true, and how one could know that they are tme - these questions are not relevant for the current discussion. For instance, whether, say, the law of supply and demand is in fact true is a question for economics, rather than for cognitive psychology. Similarly, the questions of what it means for a principle to be true, and how one can know that it is true are questions for epistemology. The psychological questions are what principles a person believes in, how those principles function in his/her cognition, and how they are acquired. 

Some important elements are found in only trace quantities, but the demand for them is great. The law of supply and demand is what makes them so expensive. Included in this group are elements such as molybdenum, tungsten, silver, mercury, palladium, platinum, and gold, all of which are elements that definitely should be recycled. It is probably true that virtually 100 percent of the gold that has ever been recovered throughout all of human history has been recycled. 

When a new process is constructed for a commodity chemical, the sale price for the chemical is largely determined by the price conpetitors charge for the same chemical. However, the law of supply and demand does affect the price. If new capacity exists without additional demand, the value of the chemical may drop if new capacity is created in response to a demand, the value of the chemical can probably be estimated from its value before the demand increased. Either way, the value of the chemical can probably be bracketed reasonably easily. 

Of course the laws of supply and demand determine the global price of crude oil, see Figure 2.6. If the supply of oil is disrupted by a hurricane or a breakdown of a major pipeline, then the price may rise because of a restriction in supply. On the other hand, if there is a sudden increase in the demand for oil from increased airplane and automobile travel in the summer or an unusually cold winter (for home heating oil), then the price of oil may rise again. 

The unique aspects of a humanitarian relief chain are carefully laid out in Chap. 8. While saving life creates social value, it generates profits for the participating retailers and logistics providers. However, the laws of supply and demand do not work well in a chaotic environment, as the consumer (aid recipient) neither places purchase orders nor pays for the delivered services. Conversely, the aid-donors who finance transactions have little control on what is delivered to the recipients. Coordination of prepositioned inventory with real time deliveries and the global flow of relief funds are discussed. 

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