Professor, I am confused in Price Quantity graph. We put Dependent variable on Y axis and Independent Variable on X axis so here we are doing inverse.
Quantity demanded is dependent on Price like if we have price of £20 so quantity is 2 and when price will fall so quantity will increase. So why we put Price on Y-axis and Quantity Demanded on X-axis?
Can you explain me please that how is price dependent on quantity?
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Price Quantity Graph
4y ago#1You are correct that normally the independent cariable is on the x-axis.
However, P-Q graphs always show quantity on the x axis. That does not mean that price is dependent no quantity; it's just the way these graphs are usually drawn.
I don't mean to intrude but I think I have some relevant information. My first degree was primarily an Economics based degree. At some stage, I came across it the issue being discussed. Of course in modern economic theory price is correctly identified as independent variable. However, in some early economic theories, at least in some circumstances, quantity demanded was theorised to be independent variable. Thus in early textbooks graphs were drawn in manner described and even though early theories were discredited, demand and supply graphs continued to be drawn in this manner. Hope this helps.
Thank you everyone! :)
You are welcome.
4y ago#5Thanks.
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