ABSTRACT
A market price is one which is made in the market as the result of the interaction of buyers and sellers. An administered price is essentially different. It is a price which is set by administrative action and held constant for a period of time. If the corresponding indexes of production for each group of items were available, they would show that the downswing of production had pivoted around the group of flexible priced commodities. A reduction of production throws workers out of employment, reduces their money income, and further reduces the demand for goods without in any way increasing the income or buying power of anyone else either by increasing their money incomes or reducing prices. The adjustment of production instead of price in the inflexible areas aggravates the initial price adjustment in the flexible industries by reducing purchasing power and throws the burden of further price adjustment on the flexibly priced commodities.
