In a message dated 11/29/12 10:47:19 AM, [email protected] writes:
> John Link wrote: > Adam Smith was talking about commodities, I believe. As prices go up, > demand > goes down until the relationship between supply and demand reaches > equilibrium. > When prices go down, demand increases, again, until the relationship > between > supply and demand reaches stability. > > Perhaps I'm not following what John Link has in mind, but this analysis seems incomplete to the point of being defective. Suppose you were at one time the producer or buggywhips and and "ice boxes". After the invention of the automobile and the "Frigidaire", the demand for buggywhips and ice-boxes went down -- but the price did not go up. The demand for a product is not a function solely of its price.
