Expected value

As we move on with our analysis, we have to consider the factors. Some special situation are extremely straightforward, regardless of the outcome.

Regardless of the factors/causes (ceterus paribus) vs regardless of the consequences

By the following statement we mean that we do not consider the other factors that are involved in this multi-dimensional process.

Exceed demand and exceed supply. We can apply this model to a wide variety of situations. Anything that is considered to be a “good” can be analyzed through the demand and supply system.  We know that by definitions, demand and supply functions are linear; therefore, they are fairly easy to calculate.

 

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