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erratim comments on How much does consumption affect production? - Less Wrong
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I'm sorry, that is correct. You were describing a supply curve that doesn't behave normally. So I can't say anything about demand curves. I apologize for the cheap shot.
In the standard economic models, supply and demand curves have elasticity that is a positive, finite number. Infinitely elastic curves are not possible within the standard models.
The priors I start with, for any market, are that it behaves in a manner consistent with these economic models. The burden of proof is on any claim that some market is behaving in a different manner.
Thanks for acknowledging that.
I think standard economics agrees with your vision of "~always positively-sloping finite supply curves" in the short term, but not necessarily the long term. Here's a quote from AmosWEB (OK, never heard of them before, but they had the quote I wanted)
Long term supply curves are different than supply curves. They are similarly named, but different concepts.
Supply curves measure supply at a price.
Long term supply curves measure market equilibrium supply as demand changes over time.
The elasticity measurement is the derivative of supply with respect to price. It cannot be applied to long term supply curves.
I agree with your definitions of the two curves, although I don't know what point you're making by the distinction.
In either case we can ask, "how much will changes in demand affect equilibrium quantity?" In a constant-cost industry, the answer will be 1:1 in the long-run (as indicated by a flat, or infinitely elastic long-run supply curve), but as you gradually shorten the scope over which you're looking at the market, making it a shorter- and shorter-run supply curve, it will steepen (elasticity decrease) such that the answer is "less than 1:1".
First, is that because they are different things it's not a contradiction to what I said.
The second is that elasticity is not validly applied to long term supply curves, as they are not a function of supply in terms of price.