Introduction to Microeconomics

Home | Mises Library | 3. The Determination of Prices

3. The Determination of Prices

  • Introduction to Micro
January 22, 2010

Tags Austrian Economics OverviewPrices

Price is determined by the equilibrium price and the equilibrium quantity. If your good is not selling, you lower the price. If your goods fly off the shelves you are selling too cheaply and you raise prices. Demand changes constantly, e.g. the shift to white wines away from dark hard liquor. Prices will fall when demand falls.

Part 3 of 14. Presented in 1986 at New York Polytechnic University.

Follow Mises Institute