[raybbr]

In all sincerity, with no insult intended, 20 minutes learning about basic supply and demand will open up a new world for you in understanding how the world works. Demand “curves” and supply “curves” have different slopes. So a small increase or decrease in supply can have drastic effects on demand and price, or vice versa depending on the slope. You can move along the curve or the curve itself can move! So you can have situations where a change in price will end all demand, a small change in price can skyrocket demand, etc.

Sorry, I looked up the curves and I don't see that at all. What you are describing more closely looks like chaos theory - anything can happen at any time.

Really, I don't see the supply as having fallen enough, through clash for clunkers, to have give this supposed rise in used car prices. There are many other factors involved.

[November 2010]

No actually spend some time learning it. You’ll see what I mean. It’s worth the time. I can’t chart here but you can have a sharp angle on a demand curve meaning there are drastic changes in demand based upon price as you move down the supply curve etc. etc., it’s not like a 5% increase in supply leads to a 5% decrease in price. You need to understand it to discuss it and it is worth learning.

[November 2010]

There are a few essays out there that looked decent. Try this one:

http://www.mindtools.com/pages/article/newSTR_69.htm

You might want a basic economics text as well, filled with libcrap as they might be.