The determination of demand curves in relation to wheat

Abstract

The ultimate problem of economic analysis is the correlation of variations in associated series of events; the determination whether and to what degree a change in one series is associated with a change in another or others, so that from a known change in the latter a probable change in the former can be predicted; and the measurement of the likelihood of that prediction being correct in any particular case. Since the 1870's economic doctrine has been pervaded by the general acceptance of one such correlation, and the development of a structure of theory on it as a foundation: namely, in general terms, an inverse correlation between quantities and prices. By this is meant that, except in special circumstances, if a given quantity of anything is offered freely for sale, the whole of it can be cleared at a certain price per unit; if the quantity be increased, the price will fall and if the quantity be decreased the price will rise. The freedom of dealings in the market, the participants' opportunities of knowledge of market conditions, the ease of communication and transport between them—all the circumstances which economists collect under the topic of the perfection or imperfection of the market—will affect the rapidity and precision with which the clearance price is attained; its stability when reached, so long as the conditions which evoked it remain unchanged; and its ease and accuracy of readjustment to new conditions when they emerge.