jamesoswald

The implication is actually that cat videos are more enjoyable per instant than opera. If that were not the case, people would always watch opera. But if there were a high fixed cost, such as a ticket price, or the mental energy required to pay attention, the opera becomes relatively attractive. Imagine driving to a movie theater and paying $10 to watch a 2 minute cat video. It would be absurd.

My point about the middle ages was that at that time, the fixed cost for all media consumption was high, so no one even considered short videos (preformances?). Now, when fixed costs are lower, you see a dramatically different pattern of consumption.

High cost/high benefit media is still around - just think about a long running tv show like Lost or Game of Thrones, where the audience is expected to put a ton of mental effort into the show. So I don't worry about a race to the bottom.

Typically, the independent variable is on the x axis and the dependent is on the y. Most modern economists consider price independent, hence the axes are reversed. The convention was created by Alfred Marshall and everyone has stuck to it ever since. I don't think it matters, since neither variable is causal. The "inputs" of the function are actually the supply and demand curves themselves and the output is both price and quantity.

I wrote the post in October of 2011, but people have reblogged it recently in response to Alchian's death.

(Original Author): Relative. In the wine example, if you add a fixed cost, total absolute consumption will decline, but relative consumption of the more expensive one will increase. Likewise, when fixed costs are lower, absolute consuption increases, as per the law of demand. People spend more time watching media in general now than in the Middle Ages, but cat videos are relatively more popular.