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Space Cynic

(Space) Economics 101

2 Dec 2018, 00:47 UTC
(Space) Economics 101
(200 words excerpt, click title or image to see full post)

It’s a basic rule of economics that the intersection of the supply and demand curves for a product or service will give you the “market clearing” price.

It’s therefore no surprise that if the cost of an item goes down, then the demand for it should increase, assuming normal economic curve profiles.
(quick lesson on demand elasticity – items with elastic demand get purchased more as the price goes down, up to a point of course. Items where demand is partially or completely inelastic behave differently, though. For instance, a medicine that you need to take once/day as an individual may be a certain price, but if the price were cut 99% you would still take the same amount, because, you know, it’s prescribed for a reason… However, more people who did not take that medicine may now be able to afford it, but again each person will still only take the amount prescribed, regardless of further decrease in price).
What’s interesting in the Space industry is that the demand is not a direct path from A to B. About 20 years ago, i was asked to give a talk on space economics at a Space Frontier Foundation hosted conference ...

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