Jason G. answered • 01/16/23
Social work, Psychology, History, Nursing, Philosophy, Business Tutor
Aristotle's law of prices is a concept that states that the price of goods and services in a market economy should be determined by the ratio of the amount of labor required to produce the goods or services and the amount of goods or services available for purchase. This concept was developed by Aristotle in his treatise “Politics”.
Aristotle believed that the law of prices was necessary to maintain a fair and equitable market. He argued that when the cost of production was too high, the cost of goods and services should increase. This would lead to a decrease in demand, which would in turn reduce the cost of production. Conversely, if the cost of production was too low, the cost of goods and services should decrease. This would lead to an increase in demand, which would in turn increase the cost of production. This concept of supply and demand is still in use today.
The Modern understanding of the law of prices is slightly different from Aristotle’s. In modern economics, the law of prices is often referred to as the law of supply and demand. This law states that the price of a good or service is determined by the balance between the quantity of the good or service that is available and the amount of people who are willing to purchase it. The law of supply and demand is based on the idea that when the supply of a good or service increases, its price decreases, and vice versa. This law is widely accepted in modern economics and is the basis of many economic theories.
