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Pastimes : Austrian Economics, a lens on everyday reality

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To: gpowell who wrote (281)	11/13/2003 1:52:48 PM
From: gpowell	Read Replies (2) of 445

Supply side Priliminary comments. A supplier supplies goods and services that satisfies the wants and needs of consumers. It might be useful to discard the distinction between consumers and suppliers and to define both as market participants exhibiting utility maximizing behavior through the exchange of goods and services. A supplier applies a transformation process on inputs to produce outputs. In the simplest case the transfer process is an identity, whereby the inputs remain unchanged. An endowment of some good that is costlessly offered for exchange is an example of an identity process. A supplier of an endowment good will participate in exchange, up to the point where the marginal rate of substitution between the goods exchanged is equal. All market participants desire to maximize utility, maximum utility is achieved through the satisfaction of wants and needs, and constraints define the limits to which wants and needs can be satisfied. It is observed that constraints have tended to ease with time, therefore any delay in immediate consumption is consistent with utility maximizing behavior.

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