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<p>[QUOTE=&quot;Nerva, post: 2780816, member: 87761&quot;]Sorry, economics pedant in the room. I can&#039;t resist another nit-pick. Supply and demand curves are wholly idealised. They&#039;re necessarily not an average of observations because it&#039;s at a point in time rather than dynamic. It makes logical inferences based on market behaviour, but real behaviour often works differently. In your auction example the seller could be said to be willing to sell at the reserve price. But could also be said to be willing to sell at the hammer price - in other words, they are taking a chance. Both are true descriptions. But the buyer is willing to pay at least the hammer price (unless the simply made a mistake). The equilibrium is where they overlap. The gain from the transaction is the sum of the difference between willing sale price and price realised for seller plus the difference between max bid and actual bid for buyer. Sorry, will get off soapbox and stop high jacking the thread now ;-)[/QUOTE]</p><p><br /></p>

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