Commodity prices are not the only prices with which economists are concerned. Securities such as bonds or debentures, stocks or shares and bills or notes, have their prices. Railway rates are prices. Foreign exchange rates express the price of current funds in one market in terms of current funds in another market. Wages, of course, may be regarded as the price of labour, rent as the price of the use of land or of other durable goods, and interest as the price of advances of money. Profits, however, are not prices, for they are not proportioned in any definite way to the amounts of goods or services supplied, but are contingent upon the success of particular under takings. Nor are taxes prices, for the governmental services for which taxes pay are diffused, and not apportioned to different taxpayers in accordance with their respective contributions. Not even the fees which are paid to Government offices for licences or for particular services are in all respects like prices, for the amount of the fee is usually propor tioned very loosely, if at all, either to the value of the service to the recipient or to its cost to the Government. But the charges which Governments make for supplying such things as water, gas, electricity and transport may be governed more or less completely, according to the circumstances of the particular case, by the prin ciples in accordance with which prices are determined.
This is a price at which supply and demand are equal. A distinction has to be made between a temporary
such as would express a balancing of the immediate factors which are operative in the market at any given time, and such an equilibrium as would be reached eventu ally if the particular factors now known to be at work could have their full effects. Equilibrium, then, is always relative to time. All economic equilibria are unstable, but it is convenient in analysis to take separate account of the factors which, if they were neither impeded nor deflected, might finally lead to a stable equi librium. Market price is the price which will be found in a given market at a given time. It may be regarded as the limiting form of short-time or temporary equilibrium price. Normal price is a price just high enough to cover the expenses of production, including whatever profits are necessary to induce men to under take the risks of productive enterprise. Because some firms pro duce at smaller expense than others, because the expense per unit of production of ten varies, directly or inversely, with the volume of output, and because of the difference, at any given time, be tween the average expense incurred per unit of product in a given establishment and the expense of producing an additional unit, the conception of normal price is attended with serious, though not altogether insuperable difficulties.
This is the price which results from the activities of many buyers and sellers, each of whom can affect the outcome only by buying or selling larger or smaller quantities according as the price is at one point or another. Monopoly price is a price fixed with a view to his or their own advantage by a single (exclusive) seller or buyer, or by a combination of sellers or buyers acting as a unit. Class price (or differential or discrimi natory price) is possible only when a monopolist seller is able to deal separately with different classes of buyers or to manage in some other way to sell his goods in what are virtually separate markets. A speculative price is a present price which is influenced by estimates of what the price of the same commodity or security will be in the future. A contract price, or what is sometimes called in speculative markets a "future," is the present price for an exchange which is to be completed by delivery or by taking delivery in the future. Mint price is the price of gold in terms of money at a Government's mint or at a bank which acts as agent for the mint. Gold price is the rather misleading name sometimes given to the result obtained by dividing a price which is quoted in terms of some depreciated paper currency by the price, in teems of the same currency, either of gold or of funds payable in some other country where a gold monetary standard is at the time effective.
This is the price at which some specified quantity of a given commodity will find purchasers. A schedule of demand prices or demand schedule, exhibits the general rela tion between the price of a commodity and the amount of it which will be purchased. Supply price, similarly, is the price at which a specified quantity of a given commodity will be offered in the market. The form of the supply schedule depends upon the con ditions under which the particular commodity is produced and also upon the period of time which is taken into account. Thus a sudden general increase in demand (in the sense of a general up ward movement of a schedule of demand prices) would have the effect of increasing the price at which a specified quantum of a given commodity would be offered for sale. But if the commodity is produced under conditions of increasing returns (i.e., if the output can be increased without a proportionate increase of costs), an increase of demand, continued over a period of years, will have an opposite effect upon its supply price. Indeed, the gradual lowering of the supply prices of commodities produced under conditions of increasing returns need not wait upon a general increase of demand. It is necessary only that demand should be elastic, i.e., that the demand price of successively larger quanti ties should not fall off too rapidly. It follows that when an ade quate period of time is taken into account, a schedule of supply prices may show that larger quantities will be supplied at lower instead of higher prices. A corresponding schedule of supply prices for a commodity produced under conditions of diminishing returns (i.e., with increased output procurable only at a more than proportionate increase of costs) would, of course, like a schedule of short-period or "instantaneous" supply prices, show higher prices associated with larger quantums of supply. (See also ECONOMICS, SUPPLY AND DEMAND, and VALUE.) (A. Yo.) For bibliography see PRICES, STATISTICS or.
the term used to indicate the practice of selling standard merchandise at a price below that advertised by the manufacturers. With many trade-marked articles the manufacturer attempts to maintain the price at which his prod ucts are sold to consumers. The idea is that both wholesalers and retailers should make a profit on his merchandise ; otherwise they might refuse to handle it. When an article becomes so well known that it is widely accepted as a standard, it is a common practice, for retailers having similar goods that they sell under the store label to reduce the price of the trade-marked article and use it in their advertising as a special attraction. Their clerks are in structed to try to sell the substitute bearing the store label in stead of the trade-marked article requested. This practice is dis advantageous to the manufacturers inasmuch as the cut-price often makes the article unprofitable for other retailers and they also attempt to substitute other brands for the one advertised. When the distributor departs from the usual practice and sells for cash where most stores would extend credit, and when he refuses to deliver goods and requires the customers to carry their own pur chases, he is expected to sell at a lower price because he gives less service. The reduced price of the "cash and carry" stores is not usually included in the term price-cutting. In most countries price-cutting is prevented by contract between the manufacturer and distributors. That form of contract has not been legal in the U.S. until the recent passage of "fair trade" laws by the separate States. Price maintenance is still illegal, by contract, excepting in States having these enactments. (H. E. A.)