Chapter 3, Problem 1QFD

To determine

The demand and supply curve for human kidneys.

Explanation of Solution

If the market in kidneys were legal, then the demand and supply curves look like the ones shown in the diagram.

The demand and supply for the kidney are relatively inelastic because this is the organ that a person needs in emergency situations despite its high cost. The demand for human organs is inelastic in nature.

If the market of kidneys is legal, then the person who needs the kidney would get them despite fluctuating prices.

The demand and supply mechanism keeps the market for the kidney in equilibrium.

If the law that prohibits the sale of kidneys exists in a market, the demand for kidneys will still remain the same. But since the supply is restricted, now a person can only donate the organ instead of selling them.

Suppose in the presence of a law that prohibits the selling of organs, X quantity of kidney is donated by peoples.

Since selling is prohibited, the supply curve is a vertical line parallel to the y-axis because supply is limited and cannot increase according to the market demand.

This explanation is shown in the graph, where the x-axis represents the quantity of the kidney and the y-axis represents the price for the kidney.

The ban or prohibition on the sale of human organs promotes barter exchange, other illegal activities and the black market in organ transfers.