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The normal supply and demand models take the supply and demand of a particular good and show that the equilibrium price is where the two curves intersect. At this point, all the people below the equilibrium point value the good as worth less than the price; on the other hand, all the people above the equilibrium point value the good as worth more than the price; people at the equilibrium point value the good at the price value.
In my mind, following this logic, everyone should want to "purchase" a free good. But that is not necessarily the case. For example, in an undergraduate program, the university will give away t-shirts, pens, etc. to the students for free. However, not all of the students will want these items. However, since the price is free, it seems that everyone should want them.
How do we reconcile both of these observations?
emphasize why the need for instrumental variables arises and how authors have approached the problem. make sure to
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