THE FORMATION OF PRICES IN THE DISORGANIZED MARKET
Whenever violent changes arise in the conditions of supply and demand, especially when they are unexpected, the free organization of the market fails to function. Then the decisive marginal offer must be ascertained by the pressure of the excessive supply and the unsatisfied demand. It may possibly not be found until after all sorts of variations which shoot beyond the mark. Whenever the disturbances are excessive, the organization of the market may be so deranged that the mechanism of the excessive supply and the unsatisfied demand breaks down and the decisive marginal offer may not be ascertained for some time. A market of this sort, we shall call a disorganized market.