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- Title
THE DETERMINANTS OF PRICING BEHAVIOUR: A STUDY OF THE CANADIAN COTTON TEXTILE INDUSTRY.
- Authors
McFetridge, D. G.
- Abstract
The article debates on various factors, which determine the behavior of industrial prices. According to economists, prices will be changed if there is a significant change in wage or raw materials costs but not in response to moderate or temporary shifts in demand. In the course of this debate other issues have been raised which also merit investigation. First, it has been argued that the relationship between demand and the rate of price change is asymmetric. It is asserted that while prices may rise relative to costs during periods of excess demand, there will not be a corresponding decrease during periods of deficient demand. Relatively small discrepancies between demand and output will not induce price changes. Increases in this discrepancy will ultimately result in more than proportional increase in the absolute value of the rate of price change. If this is the case, the relationship between demand disequilibrium and the rate of price change will be distinctly nonlinear.
- Subjects
CANADA; COTTON textile industry; PRICING; ECONOMETRICS; RAW materials; ECONOMIC demand; PRODUCTION (Economic theory)
- Publication
Journal of Industrial Economics, 1973, Vol 22, Issue 2, p141
- ISSN
0022-1821
- Publication type
Article
- DOI
10.2307/2098125