Traditional Economics and Internet

In traditional economics, supply and demand equilibrium theory is the most basic theory, and market equilibrium is determined by supply curve and demand curve. The market supply curve gives the quantity of an item that all manufacturers in the economy are willing to produce at each price. As the price rises, the supply also rises, so it is inclined upward on the curve. The demand curve of the market gives the quantity of goods needed by all individuals at each price in the economy, which is usually inclined downward. Market equilibrium price is located at the intersection of demand curve and supply curve. At this point, the manufacturer's marginal cost is equal to the marginal revenue. The curve of supply and demand reflects the law of "diminishing marginal revenue" in economics, that is to say, every time a manufacturer produces one more product, the market price drops, while the production cost is almost unchanged, so the revenue brought by the market is always less and less. These traditional economic theories have been used to this day and have played an indelible historical role in the analysis of many economic phenomena in reality. However, now it is facing great challenges, that is, the great challenges brought by the practice and performance of the "network economy" based on the network. After the network economy popularized the characteristics of high fixed cost and low marginal cost of some traditional industries, it finally formed a new viewpoint, that is, the network economy broke through the law of "diminishing marginal income" and even "negated" the law of supply and demand.