Price list

“ Each "supply curve" or "demand curve" rests upon the unconscious assumption of a price level already existing. Although the curves relate to a commodity, they relate to it only as compared with money. A price is a ratio of exchange between the commodity and money. The money side of each exchange must never be forgotten nor the fact that money already stands in the mind of the purchaser for a general purchasing power. ”

“ On the whole, the best form of index number is that expressing the price of a given bill of goods. If a definite assortment of goods cost $1.00 at one date and $1.10 at another date, these figures may be regarded as index
Fig. 2. Price Movements as Calculated by Using Different Numbers of Commodities (after Wesley Clair Mitchell)
Showing that the percentage rise or fall of the level of wholesale prices in the United States is very much the same whether many or few commodities are included in the calculations. ”

“ Supply and demand, cost of production, the capitalization theory, the imputation theory—the general laws of the concatenations and interrelations of prices—are quite adequate for the confutation of the quantity theory. They are laws concerned with particular prices, and the price-level is nothing but the average of particular prices. ”

“ When a single small country is under consideration, it is therefore preferable to say that the quantity of money in that country is determined by the universal price level, rather than to say that its level of prices is determined by the quantity of money within its borders. ”

“ Selection of the Index Number. A weighted arithmetical index number for wholesale prices of commodities should be used. Wholesale prices are more prompt to indicate what change in the dollar's weight is needed than retail prices. The frequency of calculation should probably be about once every two months to afford full time for the lag between the previous adjustment and its effect.
4. Selection of the Par. This should be left to a judicial commission. Probably we should start off the system at a price level near that existing at the time. ”

“ With respect to the first of these propositions, it may be observed, that the cost of any article to the purchaser includes, besides the ratio of the supply to the demand, another element, which, though often of little importance, is, in many cases, of great consequence. The cost, to the purchaser, is the price he pays for any article, added to the cost of verifying the fact of its having that degree of goodness for which he contracts. ”

“ Wholesale Prices in General.—The movement of wholesale prices in general is measured by the method of index numbers. The prices of commodities for which definite market quotations for definite grades exist are selected as typical in their changes of prices in general, a year or longer period is chosen as base, the price of each commodity is equated to 100 at the base period and the price in other years expressed proportionately, such numbers being called price ratios. ”

“ Each time a pile has risen, the average level of all has fallen.
VIII.75 The proposition that a general increase in demand, resulting in an increase in trade, tends to decrease and and not to increase the general level of prices, may be regarded as a sort of pons asinorum to test one's knowledge of the fundamental distinction between those influences affecting the general price level and those affecting the rise and fall of a particular price with respect to that level. ”

“ Instead of one price, every one who had commodities or services to sell adopted a scale of at least four prices: “pay price,” “money price,” “pay as money price,” and a “trusting price;” and the seller, before fixing his price, invariably asked his customer how he would pay.6 “Pay price” was barter; “money price” was payment in foreign coin; “pay as money” was in the ideal money of the island; “trusting” was an enhanced price, according to time. Thus, supposing a customer wanted a knife, its price in “pay” would be a bushel of corn; in “money price,” a fifty-cent gold or silver coin ”

“ Its proportion to their number, and the resulting worth of currency, are calculable; but its proportion to their will for labour is not. The worth of the piece of money which claims a given quantity of the store is, in exchange, less or greater according to the facility of obtaining the same quantity of the same thing without having recourse to the store. In other words it depends on the immediate Cost and Price of the thing. We must now, therefore, complete the definition of these terms.
59. All cost and price are counted in Labour. ”

“ They do so in terms of Price when measured by Money; they do so in the essentials of Value when measured by comparisons of commodities. As a rule, however, Money-prices are fair guides to Commodity values. Commodity values rise and fall according to cost of production, inclusive of delivery; and in so far as Money is stable, the rise and fall in prices is evidence of variations in production cost.
The relative rise and fall in Value, be it measured by prices in Money or otherwise, is so common a phenomenon of Trade that critics might be pardoned for denying a Value level. ”

“ Much of their reasoning goes no farther than to explain one price in terms of other prices. If we attempt to explain the money price of a finished product in terms of the money prices of its raw materials and other money costs of prices of production, it is clear that we merely shift the problem. We have still to explain these antecedent prices. ”

“ X.12 We choose, then, as one of the best index numbers of prices, the average price of the goods sold, those goods being measured in units worth a dollar in the base year; in other words, the ratio of the value of sales at actual prices to the value of the same sales if made at base prices; in still other words, the weighted arithmetical average of all price ratios, each ratio being weighted according to the values sold, reckoned at base prices. ”

“ To prevent abuses in the sales of these manufactures, their prices, which are determined upon a calculation of what they cost, and a certain per cent. added for the profits of the house, are marked upon the goods, and are never altered; and a regular account is kept of all, even of the most inconsiderable articles sold, in which not only the commodity, with its quality, quantity, an price, is specified ”

“ The price is a consideration wholly for the vendor, and the value a consideration wholly for the purchaser. Hence it follows that both value and cost enter into a bargain, even when legitimately made. But value goes solely to determine the demand, and is solely cognizable by the purchaser or consumer—by him who receives; while cost (or burden) goes to determine the price, and is solely cognizable by the seller or producer—by him who renders. ”

“ Besides, one could not always depend on goods being supplied a second time at the same price. If, for example, the merchants supply a sample of doorknobs, and quote a price, and an additional order is given for ten or fifty gross, they will in all probability increase the price ten per cent. ”

“ The reasons for dispersion are principally three: (1) Many prices are restrained by previous contract, by legal prohibition, or by force of custom. (2) Some prices are intimately related to the money metal. (3) Each individual price is subject to special variation under the influence of its particular supply and demand. There exists, however, a compensation in price movements in the sense that the failure of one set of prices to respond to any influence on the price level will necessitate a correspondingly greater change in other prices. ”

“ The buyers must be supposed as studious to buy cheap, as the sellers to sell dear. The values and prices, therefore, to which our conclusions apply, are mercantile values and prices; such prices as are quoted in price-currents; prices in the wholesale markets, in which buying as well as selling is a matter of business; in which the buyers take pains to know, and generally do know, the lowest price at which an article of a given quality can be obtained; and in which, therefore, the axiom is true, that there cannot be for the same article, of the same quality, two prices in the same market. ”

“ How the Normal Price of a Single Good in a Bundle of Unlike Goods would be Fixed.—Let us see how a bundle made up of commodities A, B, C, and D would get its value in the market. We will suppose that these articles are here named in the order of their importance, and that A has the highest utility, since it renders the most important service, and that D has the least. It may be that the article A has a utility rated at one hundred dollars in a particular man's esteem. ”

“ One commodity is measured in bushels, or units of volume of wheat, the other in dollars, or units of weight of gold. In general, a price of any species of wealth is merely the ratio of two physical quantities, in whatever way each may originally be measured. ”

“ I shall there maintain that the quantity theory, which explains gold movements on the basis of price-levels in different countries, is inadequate; that not price-levels, but particular prices, of goods most available for international trade, are of primary importance, and that of these particular prices, one, namely the "price of money," or the short time money-rate, is most significant of all. ”

“ Mill, the actual market price is the price which equalizes supply and demand in a given market; as I view the case, the ‘proper market price’ is the price which equalizes supply and demand, not as existing in the particular market, but in the larger sense which I have assigned to the terms. To this price the actual market price will, according to my view, approximate, in proportion to the intelligence and knowledge of the dealers. ”

“ A low price does not automatically constitute, from the customer's viewpoint, a high value. The price of an article is fixed by the dealer. The value of that article is fixed by the buyer, since it depends, not upon what the article costs to make or what is asked for it, but upon what it is worth to her. ”

“ So, when you spend $3,000 on computer gear today, you are in fact only spending half as much as was spent back in '79 for the Konan drive. . .you are really only spending $1,500 from 1979. . .due to changes in the value of the dollar as per an assortment of Consumer Price Index figures [none of which is in agreement with any of the others, so you are encouraged a bit to look up additional information on the subject. These figures [below] are presented only to provide a continuum to make comparisons. ”

“ The measure of price change should 274 be the movement of the index number of prices of all the important commodities produced within the country—the index number to be so weighted as to give a defined importance (50 per cent. was suggested) to the prices of those classes of foodstuffs, clothing, housing accommodation, and other commodities upon which the wage earners spend a very great part of their income. ”

“ There are, as we all know, various forces at work to produce the resultant price level. We may here start from a proposition on which we can all agree. An increase in the quantity of the monetary standard in the world—such as gold—would tend, other things being equal, to lower its value and thus raise prices. ”

“ On an upward market, perhaps, a higher price can be secured than the marked price. On a downward market or in order to move certain colors and styles, it is necessary to mark down from the original sale price. ”

“ The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which must be paid in order to bring it thither. ”

“ The price of such commodities, therefore, varies not only with the variations of demand, but with the much greater and more frequent variations of quantity, and is consequently extremely fluctuating; but the profit of some of the dealers must necessarily fluctuate with the price of the commodities. The operations of the speculative merchant are principally employed about such commodities. ”

“ On our markets a great amount of time is wasted by haggling over prices--the seller asking a ridiculous sum at first, and gradually bringing it down to a half or third of the original demand. But I noticed that the white man looked keenly at the article for sale, asked the price, carefully considered for a few moments and then stated the amount he would give, and the vender either assented to it at once, or picked up his goods and left.
There was one man, a stranger, who had a goat for sale. The white man examined it.
“How much?” he asked.
“Twenty-four fathoms of cloth,” replied the man. ”

“ Is it quite understood that there are two prices for these articles-a cash price, and a price in goods?-Yes; I think that is quite understood. Of course, if a woman comes in with a shawl for which she is willing to take 20s. in goods, she would be equally willing to take 16s. or 17s. in cash, because the difference between the 16s. or 17s. in cash and the 20s. in goods represents the retail draper's profit, which is supposed to run from 15 to 20 or 25 per cent. ”

“ The prices thus fixed are usually followed when the transaction occurs outside, and the 'market price' means really the 'exchange price.' That an enormous amount of the business of the country which is engaged in the distribution of the commodities grown or produced therein is transacted and takes place through the medium of boards of trade or exchanges cannot be doubted. ”

“ The money price at which an article sells furnishes us with comparatively little information respecting its value, if we compare distant intervals of time and different countries; for gold and silver, in which price is usually measured, are themselves subject, like all other commodities, to changes in value; nor is there any standard to which these variations can be referred. The average price of a certain quality of different manufactured articles, or of raw produce, has been suggested as a standard ”