When the Economists Arrive, Do the Prostitutes Leave?
I was walking outside the American Economic Association meetings this past Sunday when a man stopped me and asked what all the university professors were doing in one place. I told him that it was the annual convention of economists, and got a hearty laugh by telling him the old joke that when the economists arrived in town, the prostitutes left. This joke is a good illustration: the arrival of economists represents a decrease in demand; the prostitutes’ leaving represents a decrease in the amount supplied. I don’t know the shape of the supply curve, however, so I can’t speculate about the size of the change, if any, in the equilibrium price. But the joke does suggest that the equilibrium quantity transacted decreased.