<P> The model of supply and demand also applies to various specialty markets . </P> <P> The model is commonly applied to wages, in the market for labor . The typical roles of supplier and demander are reversed . The suppliers are individuals, who try to sell their labor for the highest price . The demanders of labor are businesses, which try to buy the type of labor they need at the lowest price . The equilibrium price for a certain type of labor is the wage rate . However, economist Steve Fleetwood revisited the empirical reality of supply and demand curves in labor markets and concluded that the evidence is "at best inconclusive and at worst casts doubt on their existence ." For instance, he cites Kaufman and Hotchkiss (2006): "For adult men, nearly all studies find the labour supply curve to be negatively sloped or backward bending ." </P> <P> In both classical and Keynesian economics, the money market is analyzed as a supply - and - demand system with interest rates being the price . The money supply may be a vertical supply curve, if the central bank of a country chooses to use monetary policy to fix its value regardless of the interest rate; in this case the money supply is totally inelastic . On the other hand, the money supply curve is a horizontal line if the central bank is targeting a fixed interest rate and ignoring the value of the money supply; in this case the money supply curve is perfectly elastic . The demand for money intersects with the money supply to determine the interest rate . </P> <P> Demand and supply relations in a market can be statistically estimated from price, quantity, and other data with sufficient information in the model . This can be done with simultaneous - equation methods of estimation in econometrics . Such methods allow solving for the model - relevant "structural coefficients," the estimated algebraic counterparts of the theory . The Parameter identification problem is a common issue in "structural estimation ." Typically, data on exogenous variables (that is, variables other than price and quantity, both of which are endogenous variables) are needed to perform such an estimation . An alternative to "structural estimation" is reduced - form estimation, which regresses each of the endogenous variables on the respective exogenous variables . </P>

The rationale for the law of demand can best be understood on the basis of