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It may seem that economists can never speak of anything other than Demand and Supply.1 There is a good reason for this. As we will see throughout this text, supply and demand analysis is easily understood while also being a very powerful explanatory and predictive tool.

Even high-level government policy and business strategy discussions often begin with demand and supply analysis at the level of this text. Government and business economists are well trained in sophisticated economic analysis, but basic demand and supply analysis is often the most efficient tool for exploring a variety of issues at the initial stages. Furthermore, higher level economic analysis requires a thorough understanding of the mechanics of supply and demand.

This point cannot possibly be overemphasized: if you take the time and effort now to fully and completely understand Demand and Supply analysis, you will find that the remainder of this course is fairly easy as most of it will rely on these basics; if you do not understand Supply and Demand, economics will never make sense.

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In the words of Thomas Carlyle: "Teach a parrot the terms supply and demand and you've got an economist."

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