PERFECT PRICE INELASTICITY

in inelasticity •  7 years ago 

In order to comprehend the ontological construction below, please refer to other my post for all notions in italic.

All actual changes in the price of a commodity do not affect its quantity in the case of perfect price inelasticity. As the market price of a commodity is given by its quantity, all variations of its price are setting the conditions for additional adjustments, which make the alteration of the quantity to be concurrent. Thus, any change in one of the goods is met by a parallel change in another good, which is its price, so the comparative quantities of the economic goods are not affected. Alternating price of a product is just a temporary mechanism by which the relative quantity of it is sustained on the market in the long run, and it does not affect the general structure of supply and demand.

Historical Backdrop
• LEON WALRAS Elements of Pure Economics: effective offer and effective demand.
• JOAN ROBINSON The Economics of Imperfect Competition: absolute price inelasticity.

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