essay #3.doc - quantity approaches the minimum essential...

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Alicia Deal HON231 10-23-01 Essay #3 The traditional economic model of supply and demand curves of marketed goods or services shows that as the marginal demand of a quantity approaches zero, the price increases. The concept of marginal supply states that as the quantity increases so does the price. However, it can be assumed that this model would not be the same for the supply and demand curves for ecosystem services. Although the concept of demand is much like that of the traditional model, the demand curve is much steeper. The actions by economic system cannot increase or decrease the ecosystem services; therefore, the supply curve is almost vertical. This model also shows that the consumer surplus and the total economic value also reach infinity as the
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Unformatted text preview: quantity approaches the minimum essential level of services. An example of this model would be the effects a natural disaster would have on the demand for lumber. For example, the supply for lumber before a tornado would be unchanged. In the aftermath of a tornado the consumer demand for lumber would increase on previously unchanged supply. Therefore, as the quantity decreases with the increased demand, the price increases. Although this model explains the demand and supply curves for ecosystem services, Constanza et al. uses instead the conventional model to estimate the value of the ecosystem services. Therefore, flaws and errors are certain to be contained in this attempt to determine the monetary worth of ecosystem services....
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This note was uploaded on 06/30/2011 for the course HNR 231 taught by Professor Staff during the Fall '01 term at Sam Houston State University.

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