A Toy Model of Production Costs and Supply
In Economics as Malignant Make Believe I showed that the derivation of the supply curve in mainstream (neoclassical) economics is nonsense because production costs are nothing like they are assumed to be. This made me wonder, however, what would happen if youβd use a more realistic model of production costs β What would production and supply look like then? This isnβt that hard to model, so I built a simulation model on a free afternoon. In the following, I will first explain the model and after that I will discuss the results of running the model at different settings as...