CHAPTER IV 



THE LAW OF DEMAND 



Kann man nicht die Nachfragefunktion genauer feststellen, so 

 genau, dass wir nicht bloss ein eindeutiges, sondern ein konkretes 

 Resultat gewinnen? Ich glaube die Antwort zu horen: Welch' 

 ein phantastisches Unterfangen-Unberechenbarkeit der wirtschaft- 

 lichen Vorgange — steter Wechsel — u. s. w! 



Joseph Schumpeter. 



Questions affecting for the most part the supply of 

 commodities have thus far been the object of our in- 

 vestigation, but the inquiry as to the cause and law of 

 economic cycles must extend to a consideration of 

 cycles of values and prices. Since the rhythmical 

 variation in the supply of crops produces its effect upon 

 crop prices in accordance with the laws of demand for 

 the several crops, the obvious first and necessary step 

 in bringing the results of the preceding chapters to bear 

 upon the question of the cause and law of economic 

 cycles is to solve the problem of the relation between 

 the variations in the supply of the several crops and 

 the resulting variations in their respective prices. It 

 is required to derive from existing data the concrete 

 laws of demand for the representative crops. 



The Theory of Demand 



The mathematical treatment of the theory of demand 

 furnishes two doctrines that are of importance in our 



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