How a $2 Metal Plate Defeated the Laws of Supply and Demand

If you’ve ever cracked open a basic economics textbook, you’ve probably seen a chart that looks like this before. Two lines intersecting. One represents demand. One represents supply. And where they intersect reveals some kind of clearing price. If demand goes up, price goes up, and voila: Balance is achieved.

Of course, even economists will admit that in the real world nothing is quite so simple. But the basic intuitions contained in the chart are pretty foundational to how people think about the economy.