Human Action - annotations

Page 1

Monopolistic Prices

A monopoly is a prerequisite of a monopolist price, but isn't the only one.

There are only two categories of prices, a competitive and a monopolistic one.

For it to be a monopolist price, the entrepreneur need to be able of control the supply without "losing money".

Commercial Reputation

It's a fact that commercial reputation exists, and that it is important to a businessman gain trust from its buyers.

Commercial reputation doesn't affect the competitiveness.

Price Connection

There are two types of price connections;

first: connection of consumption;

the second one: substitution connection.

Prices and Income

Infinite income sources don't exist, all income methods are at the mercy of the market.

Prices and Production

The market guides all production methods to its better use

Page 2

The Indirect Trade

Indirect trade is a natural process

The demand for a currency is made up of two factors: its demand for consumption and production and its demand as money

Page 3

Money is intrinsically unstable.

Fiduciary money: a type of money that doesn't have a reserve

money certificate =/= fiduciary money

certificates of money doesn't affect the economy, the amount of total cash in the market stay the same

but fiduciary money does, it have the same effect as "normal" money.

There's some limits for the quantity of fiduciary money:

1 - The trust factor, if your customers don't trust in your money, your money is worthless;

the customers will try to withdraw the money, and here is where crisis happens

2 - Don't make the amount of fiduciary money so high that people start getting crazy