Economic Methods for Lawyers

Economic Methods for Lawyers

Emanuel Towfigh and Niels Petersen

Responding to the growing importance of economic reasoning in legal scholarship, this innovative work provides an essential introduction to the economic tools, which can usefully be employed in legal reasoning. It is geared specifically towards those without a great deal of exposure to economic thinking and provides law students, legal scholars and practitioners with a practical toolbox to shape their writing, understanding and case preparation.

Chapter 3: Demand, supply, and markets

Alexander Morell

Subjects: economics and finance, law and economics, law - academic, law and economics


This chapter covers the fundamentals of economics: demand, supply, and markets. In law, you can apply the concepts that are covered in this chapter to many different contexts. Think of a dispute in which neighbors want to prevent an airport from working at night. Imagine you were a policy-maker, judge, or government official having to decide the issue. In any case, you would want to use law as a means to resolve the dispute. The dispute is about scarce resources. You cannot have both quiet nights and planes flying at night. Any legal resolution of the dispute will allocate rights and thereby resources (nightly peace for neighbors or the opportunity to make money to the airport). You have seen in the economic paradigm (see Chapter 2, sections I.B and II) that economics deals with the allocation of scarce resources. Applying a standard of efficiency would recommend allocation of the right to determine whether the airport can work at night with the party that values it most. The section on demand will tell you how economists think about the value of goods – for instance, the value of quiet nights. You have been briefly introduced to the notion of utility and to the fact that it is decreasing at the margin (see Chapter 2, section I.C.1). Now you will learn how utility is constructed from tradeoffs and how demand is constructed from utility and how value in economic terms is inherently relative.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information