Abstract
In a number of financial market texts the bid-offer spread in flow markets is not well depicted. In such markets the demand and supply curves to the left of the equilibrium point cannot exist. This article offers an alternative depiction: only the curves to the right of the equilibrium point exist and the spread is the differential between the highest bid (the superior) price on the demand curve and the lowest (the superior) price on the supply curve. There are inferior bid and offer prices, represented by the downward-sloping demand curve and upward-sloping supply curve, respectively. The alternative depiction offered applies to both quote-driven and order-driven markets.
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