Calculation of wholesale and retail prices

Abstract

As a result of the equalization of the profitability of capitals (which is associated with the formation of a surplus of commodities and production), with the constancy of the volume of circulating money (which maintains the constancy of the price level), as a result of the selective inclusion of consumption requests in the market, in a certain interval of the ratio of satisfied demand to total supply, there is observed, due to a number of reasons that prevent the reduction of prices, the stabilization of the prices of final commodities in relation to their value, their maintenance in equilibrium even with some redistribution of satisfied demand between goods. Continuing the logic of marginalism, we must conclude that the partial marginal utilities of less rare commodities, through the limitation of their consumption, are necessarily equated with the marginal utility of the rarer commodity, which has unaccounted consequences. The «laws of supply and demand» (where price is not defined as a concept [1, p.24]) are incompatible with the theory of marginal utility, which means that price is a function of the amount of consumption, but not vice versa. The law of demand, in essence, asserts the tendency of the partial rarity of a commodity, due to the growth of purchases, to its market rarity without observing marginal ratios. The assertion that when the price rises, it is advantageous to increase production, is inconsistent with the marginal position that the price rises with an increase in the scarcity of the commodity, which corresponds to a decrease in the amount of utilities that go into income. The dependence of demand on price is consistent with the labor theory of value.