Consider a market for a new, patented medication that is essential for a small group of patients with a rare disease, but is also a mild convenience for a much larger group of people with a common, non-critical condition. If the relationship between price and the number of units people are willing to buy is graphed, which of the following best describes the likely shape of the graph?

Analyzing a Non-Linear Supply Curve

The Reality Behind Linear Economic Models

In economic analysis, using a straight-line demand curve to model a market is always less accurate and therefore less useful than using a precisely measured, non-linear curve.

The Trade-offs of Simplified Economic Models

Analyze the following market descriptions. Match each description to the most likely shape of its corresponding supply curve, based on the implied distribution of production costs (willingness to accept).

Interpreting a Non-Linear Demand Curve

Consider a market for a specific good where nearly all potential consumers value the item at approximately the same price. If the market price were to drop just below this common valuation, a very large number of people would suddenly be willing to buy. Which of the following best describes the shape of the curve representing the relationship between price and the total quantity consumers are willing to buy?

Evaluating a Linear Demand Model for Public Transit

A city government uses a simple straight-line demand curve to predict the impact of a new tax on sugary drinks. In reality, the market consists of two main consumer groups: a large group of brand-loyal customers who are not very sensitive to price changes, and another large group of casual consumers who are very sensitive to price changes. Compared to the actual market outcome, the government's model using a straight-line curve will most likely: