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In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.
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- Quotes are arranged alphabetically by author
A - F
- By reducing any quality to quantity, myth economizes intelligence: it understands reality more cheaply.
- PRICE, n. Value, plus a reasonable sum for the wear and tear of conscience in demanding it.
- Ambrose Bierce, The Devil's Dictionary (1911).
- The logic is simple: If you are going to be a net buyer of stocks in the future, either directly with your own money or indirectly (through your ownership of a company that is repurchasing shares), you are hurt when stocks rise. You benefit when stocks swoon. Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance. These shareholders resemble a commuter who rejoices after the price of gas increases, simply because his tank contains a day’s supply.
Charlie and I don’t expect to win many of you over to our way of thinking – we’ve observed enough human behavior to know the futility of that – but we do want you to be aware of our personal calculus. And here a confession is in order: In my early days I, too, rejoiced when the market rose. Then I read Chapter Eight of Ben Graham’s The Intelligent Investor, the chapter dealing with how investors should view fluctuations in stock prices. Immediately the scales fell from my eyes, and low prices became my friend. Picking up that book was one of the luckiest moments in my life.
G - L
- This is precisely what the price system does under competition, and which no other system even promises to accomplish. It enables entrepreneurs, by watching the movement of comparatively few prices, as an engineer watches the hands of a few dials, to adjust their activities to those of their fellows. The important point here is that the price system will fulfill this function only if competition prevails, that is, if the individual producer has to adapt himself to price changes and cannot control them. The more complicated the whole, the more dependent we become on that division of knowledge between individuals whose separate efforts are coordinated by the impersonal mechanism for transmitting the relevant information known by us as the price system.
- Friedrich Hayek, The Road to Serfdom (1944), Chap. 4 : The “Inevitability” of Planning
- There are many anticipators of marginal analysis. Three major names were Augustin Cournot (1801-1877), J. H. von Thünen (1783-1850), and H. H. Gossen (1810-1858).
Cournot's originality and ingenuity can hardly be exaggerated. In 200 small pages, he described and defined the downward-sloping demand curve, completely analyzed the maximization of profit under conditions of monopoly, advanced an ingenious explanation of duopoly pricing, proved that equilibrium price occurred when aggregate supply equaled aggregate demand, and exactly defined the market from which we call perfect competition and he called "unlimited competition." And the book went unread.
- Robert Lekachman, A History of Economic Ideas (1959) Part III. Marginalists and Opponents: 10. The New Economics.
M - R
- Economies are enormous groups of people engaged in a multitude of interdependent activities. What prevents decentralized decision making from degenerating into chaos? What coordinates the actions of the millions of people with their varying abilities and desires? What ensures that what needs to be done is in fact done? The answer, in a word, is prices. If an invisible hand guides market economies, as Adam Smith famously suggested, then the price system is the baton that the invisible hand uses to conduct the economic orchestra.
- N. Gregory Mankiw, Principles of Economics (6th ed., 2012), Ch. 4. p. 83; The Market Forces of Supply and Demand
- [I]n all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer's best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.
- We need to recognise that the entire information sector—from music to newspapers to telecoms to internet to semiconductors and anything in-between—has become subject to a gigantic market failure in slow motion. A market failure exists when market prices cannot reach a self-sustaining equilibrium. The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes.
S - Z
- Prices coordinate the decisions of producers and consumers in a market. Higher prices tend to reduce consumer purchases and encourage production. Lower prices encourage consumption and discourage production. Prices are the balance wheel of the market mechanism.
- Prices play a crucial role in determining how much of each resource gets used where and how the resulting products get transferred to millions of people. Yet this role is seldom understood by the public and it is often disregarded entirely by politicians.
- Nothing makes us understand the many roles of electricity in our lives like a power failure. Similarly, nothing shows more vividly the role and importance of price fluctuations in a market economy than the absence of such price fluctuations when the market is controlled.
- Because economic resources are not only scarce but have alternative uses, the efficient use of these resources requires both consumers and producers to make trade-offs and substitutions. Prices provide the incentives for doing so. When the price of oranges goes up, some consumers switch to tangerines. But not everyone stops eating oranges when they become more pricey. Some people continue to eat the same number of oranges they always ate, some cut back a little, some cut back a lot, and others forget about oranges completely and go on to some other fruit. Note that what is happening here is not just substitution— it is incremental substitution.
- In the extreme case where the security is held by the same family for generations, a practice by no means uncommon, the selling price in the end is a minor matter.
- There is a price which is too great to pay for peace, and that price can be put in one word. One cannot pay the price of self-respect.