Chapter III
By what is the price of a commodity determined?
By what is the price of a commodity determined?
By the competition between buyers and sellers, by the relation of the demand to the supply, of the call to the offer. The competition by which the price of a commodity is determined is three-fold.
The same commodity is offered for sale by various sellers. Whoever sells commodities of the same quality most cheaply, is sure to drive the other sellers from the field and to secure the greatest market for himself. The sellers therefore fight among themselves for the sales, for the market. Each one of them wishes to sell, and to sell as much as possible, and if possible to sell alone, to the exclusion of all other sellers. Each one sells cheaper than the other. Thus there takes place a competition among the sellers which forces down the price of the commodities offered by them.
But there is also a competition among the buyers; this upon its side causes the price of the proffered commodities to rise.
Finally, there is competition between the buyers and the sellers; the ones wish to purchase as cheaply as possible, the others to sell as dearly as possible. The result of this competition between buyers and sellers will depend upon the relation between the two above-mentioned camps of competitors, i.e., upon whether the competition in the army of buyers or the competition in the army of sellers is
