<ol>
<li>In supply and demand model both price depends on quantity and quantity depends on price. These two variables are determined together. They are both endogenous variables. Consequently, here the rule that independent variable goes on <span class="math-container">$x$</span>-axis and dependent variable goes on <span class="math-container">$y$</span>-axis does not apply because neither of the two variables is exogenous.</li>
<li>By convention in economics price is always plotted on <span class="math-container">$y$</span>-axis. This was not historically always the case. As you can see in <a href="https://economics.stackexchange.com/a/39357/15517">this answer</a> in past there were several authors that decided to plot price on <span class="math-container">$x$</span>-axis as well. However, the convention of price going on <span class="math-container">$y$</span>-axis was eventually established by Marshall who considered price to be the depend variable (although really they are both endogenous), and popularized this convention through his textbook (Principles of Economics) that was widely used.</li>
</ol>

CC BY-SA 4.0
2020-12-05T16:24:58.937Z
2020-12-05T16:36:26.547Z
2020-12-05T16:36:26.547Z
1muflon1
<p>As the other answer already stated, this is mostly due to a convention that goes back to Marshall. However, I think there is an additional reason for this.</p>
<p>Optimizing economists often think &quot;on the margin&quot; and a central equation in many economic models is &quot;marginal benefit = marginal cost.&quot; In a competitive market the marginal revenue is simply the price that firms take as given. However, firms with market power can influence the price. A monopolist takes the demand as given and calculates &quot;marginal revenue&quot; to equalize it to &quot;marginal cost.&quot; It is unintuitive to think about marginal revenue in terms of price, but much more intuitive to think about marginal revenue in terms of quantity. With quantity on the horizontal axis, you can easily draw the graph of marginal revenue as you intuitively think about it into your p-q diagram, where you already plotted your inverse demand function.</p>

CC BY-SA 4.0
2020-12-05T17:17:02.327Z
2020-12-05T17:17:02.327Z
Bayesian
<p>Watch the video from 5:35:</p>
<ul>
<li><a href="https://youtu.be/FqG8g_EdXrA?list=PLozHEW87IH9klB0yS-e9ulEXfSB0bHiw3" rel="nofollow noreferrer">law of demand</a></li>
</ul>
<p>In the description, the narrator says that &quot;demand depends on price&quot;.</p>
<p>However, in the plot, he is keeping price &quot;P&quot; as the dependent variable.</p>
<p><a href="https://i.sstatic.net/svKMb.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/svKMb.png" alt="enter image description here" /></a></p>
<p>How does that make sense?</p>

CC BY-SA 4.0
2020-12-05T16:15:04.163Z
You choose: (a) Because economists are contrary; (b) Because economists are sheep, following Marshall's conventions; (c) Because economists think firms and consumers make decisions based on quantities not prices, and then let a market mechanism find the clearing price
Henry
CC BY-SA 4.0
2020-12-05T20:53:21.950Z
It's an X/Y graph.  Like voltage across a resistor as a function of resistance.  It could go either way.  A particular orientation is nor "required" so long as the graph is monotonic.
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Why is price plotted as a dependent variable?
user366312
# Why is price plotted as a dependent variable?

(Asked by: username_0 on 2020-12-05)

Watch the video from 5:35:

* [law of demand](https://youtu.be/FqG8g_EdXrA?list=PLozHEW87IH9klB0yS-e9ulEXfSB0bHiw3)

In the description, the narrator says that "demand depends on price".

However, in the plot, he is keeping price "P" as the dependent variable.

[![enter image description here](https://i.sstatic.net/svKMb.png)](https://i.sstatic.net/svKMb.png)

How does that make sense?

**Tags:** supply-and-demand, price

> **Comments:**
> **username_1**: You choose: (a) Because economists are contrary; (b) Because economists are sheep, following Marshall's conventions; (c) Because economists think firms and consumers make decisions based on quantities not prices, and then let a market mechanism find the clearing price  
> **username_2**: It's an X/Y graph.  Like voltage across a resistor as a function of resistance.  It could go either way.  A particular orientation is nor "required" so long as the graph is monotonic.  

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## 2 answers

### Answer by username_3 on 2020-12-05. Score: 2 | Accepted answer

1. In supply and demand model both price depends on quantity and quantity depends on price. These two variables are determined together. They are both endogenous variables. Consequently, here the rule that independent variable goes on $x$-axis and dependent variable goes on $y$-axis does not apply because neither of the two variables is exogenous.
2. By convention in economics price is always plotted on $y$-axis. This was not historically always the case. As you can see in [this answer](https://economics.stackexchange.com/a/39357/15517) in past there were several authors that decided to plot price on $x$-axis as well. However, the convention of price going on $y$-axis was eventually established by Marshall who considered price to be the depend variable (although really they are both endogenous), and popularized this convention through his textbook (Principles of Economics) that was widely used.


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### Answer by username_4 on 2020-12-05. Score: 1

As the other answer already stated, this is mostly due to a convention that goes back to Marshall. However, I think there is an additional reason for this.

Optimizing economists often think "on the margin" and a central equation in many economic models is "marginal benefit = marginal cost." In a competitive market the marginal revenue is simply the price that firms take as given. However, firms with market power can influence the price. A monopolist takes the demand as given and calculates "marginal revenue" to equalize it to "marginal cost." It is unintuitive to think about marginal revenue in terms of price, but much more intuitive to think about marginal revenue in terms of quantity. With quantity on the horizontal axis, you can easily draw the graph of marginal revenue as you intuitively think about it into your p-q diagram, where you already plotted your inverse demand function.


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