The Theory of Price (W. Paul Peters)

The Theory of Price by W. Paul Peters explains how prices are determined in a market based on the relationship between supply and demand. When demand for a product increases and supply remains unchanged, prices tend to rise. Conversely, if supply exceeds demand, prices usually fall. Peters emphasizes that prices act as signals, guiding producers and consumers on how much to produce and buy. External factors like costs, competition, and consumer preferences also influence prices. Overall, the theory highlights that prices result from complex interactions within the market, balancing the forces of supply and demand to allocate resources efficiently.