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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Wildstar who wrote (263)	11/9/2003 11:53:46 PM
From: Don Lloyd	Respond to of 445

Wildstar, The first issue, which is probably a side issue, is the determination of the price of the consumer good itself. You have written before that according to Austrian theory, the price of a consumer good is dependent on: 1. Specific product demand from its potential purchasers. 2. Specific product supply from its suppliers. 3. Money demand to hold from the potential purchasers of the product. 4. Money supply held by the potential purchasers of the product. 5. The competing demand for all other products from its potential purchasers. 6. The competing supply of all other goods and services from their suppliers. While the above is true, it is primarily a formulation that is useful when monetary effects are being considered. It is probably both too general and not specific enough when considering the determination of company set prices of individual products. The goods and services that I will purchase tomorrow, at market prices that I am aware of and can actually afford and achieve, are those that will, in my judgment, in a single combination, provide me with the means for a higher level of subjective satisfaction tomorrow night than any other possible combination that may be a known alternative. As I buy individual goods and services at the lowest of the available listed prices, I will be selectively removing part of the available supply from the market, effectively and eventually, in conjunction with everyone else, forcing the subsequent market prices of the specific goods and services which I buy to rise. Market prices will fall if and when the suppliers of specific goods and services find that their products are being left on the shelf to an undesirable extent. Regards, Don