ABSTRACT
§ 1. Supply and demand must be treated as ‘flows,’ not fixed ‘funds.’Price-change is then seen as shifting with the rate of flow: its cause will be an increase or decrease of demand in relation to supply. —§ 2. Industrial causes affecting supply relate to (a) changes in economy of industrial arts; (b) changes in supply of the several factors. —§ 3. On the demand side (I) changes in the art of consumption, (2) changes in the number of consumers or their aggregate income, are disturbing influences on prices. —§ 4. A fall in expenses of production will affect price according to ‘elasticity of demand.’ There may be several possible new price levels. —§ 5. Elasticity of demand varies with (1) the degree of importance attaching to the article, (2) the effect of a price-change upon the other elements in a standard of consumption. —§ 6. Elasticity of supply is quicker and less calculable in its working, for the arts of production are less conservative than the arts of consumption.
