Explain why Calvin's ideas about supply and demand are wrong. calvin and HODDES YOHOW DO YOUJUSTIFY CHARGING15 DOLLARS??SUPPLY ANDDEMAND.15 BUCKSA GLASS?THAT'S RIGHT!WANT SOME?YOU'RE OUT OFYOUR MIND.I'M GOINGHOME TO DRINKSOMETHINGELSELEMONADE$15AND AS PRESIDENT AND CEO. OFTHE COMPANY, I DEMAND ANEXORBITANT ANNUAL SALARY!SURE! PUT ME OUTOF A JOB IT'SYOU ANTI-BUSINESSTYPES WHO RUINTHE ECONOMY$150LEMONGREGLASSLEMONSAND AS MY OWN EMPLOYEE, IDEMAND A HIGH HOURLY WAGEAND ALL SORTS OF COMPANY BENEFITSAND THEN THERE'S OVERHEAD ANDACTUAL PRODUCTION COSTS!LEMONAGE8$15GLOSSLEMONADE315 GLASSWHERE'S THEDEMAND?!I DON'T SEEANY DEMAND!BUT IT LOOKSLIKE YOU JUSTTHREW A LEMONIN SOMESLUDGE WATER!THERE'S LOTSOF DEMAND!GLEMON DE$15 LASWELL, I HAVE TOCUT EXPENSESSOMEWHERE IFI WANT TO STAYCOMPETITIVEYEAH?SURE! AS THE SOLESTOCKHOLDER IN THISENTERPRISE, I DEMANDMONSTROUS PROFIT ONMY INVESTMENT.WHAT IF IGOT SICKFROM THAT?"CAVEAT EMPTORISTHE MOTTO WE STANDBEHIND! I'D HAVETO CHARGE MORE IFWE FOLLOWED HEALTHAND ENVIRONMENTALREGULATIONS.I NEED TO BESUBSIDIZED.

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Explain why Calvin's ideas about supply and demand are wrong.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section: Chapter Questions

Problem 8PA

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Question

Explain why Calvin's ideas about supply and demand are wrong.

calvin and HODDES YO
HOW DO YOU
JUSTIFY CHARGING
15 DOLLARS??
SUPPLY AND
DEMAND.
15 BUCKS
A GLASS?
THAT'S RIGHT!
WANT SOME?
YOU'RE OUT OF
YOUR MIND.
I'M GOING
HOME TO DRINK
SOMETHING
ELSE
LEMONADE
$15
AND AS PRESIDENT AND CEO. OF
THE COMPANY, I DEMAND AN
EXORBITANT ANNUAL SALARY!
SURE! PUT ME OUT
OF A JOB IT'S
YOU ANTI-BUSINESS
TYPES WHO RUIN
THE ECONOMY
$150
LEMONGRE
GLASS
LEMONS
AND AS MY OWN EMPLOYEE, I
DEMAND A HIGH HOURLY WAGE
AND ALL SORTS OF COMPANY BENEFITS
AND THEN THERE'S OVERHEAD AND
ACTUAL PRODUCTION COSTS!
LEMONAGE
8
$15
GLOSS
LEMONADE
315 GLASS
WHERE'S THE
DEMAND?!
I DON'T SEE
ANY DEMAND!
BUT IT LOOKS
LIKE YOU JUST
THREW A LEMON
IN SOME
SLUDGE WATER!
THERE'S LOTS
OF DEMAND!
G
LEMON DE
$15 LAS
WELL, I HAVE TO
CUT EXPENSES
SOMEWHERE IF
I WANT TO STAY
COMPETITIVE
YEAH?
SURE! AS THE SOLE
STOCKHOLDER IN THIS
ENTERPRISE, I DEMAND
MONSTROUS PROFIT ON
MY INVESTMENT.
WHAT IF I
GOT SICK
FROM THAT?
"CAVEAT EMPTORIS
THE MOTTO WE STAND
BEHIND! I'D HAVE
TO CHARGE MORE IF
WE FOLLOWED HEALTH
AND ENVIRONMENTAL
REGULATIONS.
I NEED TO BE
SUBSIDIZED.

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