Scholarly Comments on Academic Economics

Response to Tabarrok

by

Abstract

EVERY GRADUATE OF PRINCIPLES OF ECONOMICS LEARNS THAT supply curves slope upwards. But most of them quickly forget the assumptions that make this so. Some may recall that a perfectly competitive market of identical firms yields a horizontal long-run supply curve. Others may recall that monopolists don’t have one at all. Relatively few will recall the obvious, but usually implicit, assumption that payment for goods and services supplied are actually made to those who create the supply. In Byrne and Thompson (2001), we made this trivial idea the cornerstone of an analysis of financial incentives for cadaveric organ donation.