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Worked-example setupScope and assumptions
- The Linden equations and input-cost increase are stipulated fictional model inputs, not estimates from production or inventory records.
- The baseline movement changes only the chair's own price; the input-cost comparison changes only the supply intercept while demand remains fixed.
- Product, quality, geography, seller definition, period, and units remain unchanged across comparisons.
- Period
- One representative fictional week
- Units
- USD per qualifying chair and qualifying chairs per week
- Rounding
- Exact whole-dollar prices and whole-chair model quantities
First comparison: move on one relationship
Baseline supply is Qs = 200 + 10P. At $50, quantity supplied is 700 chairs
per week. At $60, it is 800. The chair's own price changed while the supply
relationship stayed fixed, so this is a 100-chair increase in quantity
supplied, not an increase in supply.
Second comparison: hold price and change the relationship
The packet stipulates an input-cost increase and lowers the supply intercept to zero while preserving the slope. At the common $60 price, sellers would offer 600 chairs rather than 800. This is an inward supply shift in the model: 200 fewer chairs at the same price.
The input-cost label supplies the teaching mechanism. In a real analysis, the analyst would test which inputs changed, their dates and units, contract and hedging effects, capacity, substitution, seller entry or exit, and whether prices and demand changed at the same time.
Inventory is a separate record
An inward supply shift cannot be proven from one inventory increase. Inventory reconciles opening stock, production or purchases, sales or usage, returns, write-downs, and closing stock. Quantity supplied is a price-specific offer in the market model. Link the records when evidence supports the mechanism; do not rename one as the other.
Verified calculation · economics foundations analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- linear markets
- 2 fields
Inspect data
{
"baseline_supply": {
"demand_intercept_quantity": 1400,
"demand_quantity_per_price": 10,
"price_checks": {
"price_50": 50,
"price_60": 60
},
"supply_intercept_quantity": 200,
"supply_quantity_per_price": 10
},
"input_cost_increase": {
"demand_intercept_quantity": 1400,
"demand_quantity_per_price": 10,
"price_checks": {
"reference_price_60": 60
},
"supply_intercept_quantity": 0,
"supply_quantity_per_price": 10
}
}Recomputed result
| Measure | Value |
|---|---|
| baseline supply equilibrium price | 60 |
| baseline supply price 50 quantity supplied | 700 |
| baseline supply price 60 quantity supplied | 800 |
| input cost increase equilibrium price | 70 |
| input cost increase reference price 60 quantity supplied | 600 |