Which is More Important: Demand or SUpply?
An important reason for introducing time clement in the determination of price by Marshall was that it is thereby possible to resolve the controversy raised among economists before Marshall as to whether it is demand or supply which determines price. According to Marshall both demand and supply determine price. Rut, “as a general rule”, said Marshall, “The shorter the period which one considers the greater must be the share of our attention which is given to the influence of demand on value; and the longer the period the more important will be the influence of cost of production on value. Actual value at any time the market value as it is often called -is more often influenced by passing events and causes whose action is fitful and short-lived than by those which work persistently. Uut in the long-run these fitful and irregular causes in a large measure affects one another’s insala cncc