Final price
The price corresponding to the future state of rest is called the final price. The prices in a market economy tend toward equilibrium and final prices. The fictional evenly rotating economy is in equilibrium and therefore all prices are final prices.[1]
Final price as a hypothetical concept
Final price is in short, the price that would eventually emerge if no new data appeared to change the course of market actions and conditions. It is the hypothetical or imaginary price which would result with the passage of the time necessary to carry to completion all actions which are the consequence of using existing human knowledge and factors of production in attempts to satisfy presently held value scales in so far as human action can satisfy them.
A final price is hypothetical or imaginary because it contemplates no change in human ideas, knowledge or value scales during the time needed to carry out the actions momentarily decided upon at any one time. This implies an actual impossibility and the absolute rigidity of the mental contents of human minds over a period of time sufficient to complete all actions contemplated at one time. The final price is a helpful concept for studying and understanding the formation of actual market prices.[2]
References
- ↑ Ludwig von Mises. XVIII. The Scope and Method of Catallactics, 5. The State of Rest and the Evenly Rotating Economy, Human Action, online version, referenced 2011-02-04.
- ↑ Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-07-12.
