Wednesday, January 12, 2011

OK, what are prices good for?

They are used for advertisement in the simplest sense, they are used to prevent needless queues in the wait for goods, they partition the market. Prices can't exist until there is some regularity to production flows.

But economists are faced with a problem, sometimes only average prices remain, the actual flow statistics are gone, hidden. But worse, the economist gets price information that is averaged to a sample period different than the actual sales period.

The entrepreneur can get the flow information, he is closer to it in time and place.

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