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Essay / Research Paper Abstract
This paper discusses economics in terms of price theory, the idea that price drives the market, rather than supply or demand. Bibliography lists 5 sources.
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5 pages (~225 words per page)
File: D0_MTprithe.rtf
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Unformatted sample text from the term paper:
on supply and demand, and what the market can support a product or service for. In the realm of economics, however, exists a variety of theories to explain why demand,
supply and anything else behaves the way it does. One such theory is price theory, which was introduced by economist John Keyes during the 20th century. These days, economists dont
necessarily embrace the Keynsian theory that price drives everything, however, there are definite examples of price theory in the world around us, which this paper will attempt to examine and
explain. In its simplest form, price theory is the analysis - or study - of why things cost what they do, and
how prices function to control economic activity (Friedman, 1990) Prices, in addition, are determined by what value a buyer and seller places on a product or service, rather than figuring
in the more objective costs of production (Skousen, 1998). The higher the price, the smaller quantity people are going to want to buy and therefore, the larger the quantity that
sellers are willing to offer for sale (Skousen, 1998). Beyond that, economic thinkers and business people have used the concept of price theory to do everything from analyze the factors
behind supply and demand to collude in anti-trust situations. By using the price theory to explain economics, theorists are basically stating that it is price that drive the economy, rather
than supply or demand. Throughout this paper, well examine various ways in which pricing - and the concept of price theory -
has defined a market or has controlled supply and demand. There were times during the 1970s, for example, when the U.S.
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