THE THEORY OF VALUE 
SELLERS 
Bi asks for his horse roo florins. 
Ry re ht <4 £< 110 [43 
2 41 ¢ zs 1 T =0 £C 
Ea ‘ce “ 0° t Ton «© 
Ls ERY ¢ 2 a 0 Cs 
Dot pleat ors 
Pe ER 
B8§ £’ “‘ £2 14 200 i’ 
Let us assume that the buyers begin by offering 130 florins; 
all of them would be willing to obtain horses at this price, but 
only two of the sellers (Br and B2) would consent to meet their 
price. This being the case, the exchange obviously cannot be 
realised since the sellers would doubtless utilise the compe- 
tition between the buyers to bring about a higher price. Like- 
wise the competition, among the buyers themselves would pre- 
vent the fwo buyers from finishing their transactions at 130 
florins per horse. As the price rises, the number of competitors 
among the purchasers will decrease; for instance, if the price 
exceeds 150 florins, purchaser Aro also is eliminated, while a 
price exceeding 170 florins will eliminate purchaser Ag, etc. 
On the other hand, as the number of purchasers decreases, the 
number of sellers increases, who will be enabled economically 
to take part in the exchange transaction. At the price of 150 
florins, B3 can also sell his horse; at a price of 170 florins, 
even By, etc. At a price of 200 florins, there is still compe- 
tition among the purchasers. But the situation changes if a 
further increase in price takes place. Let us assume that the 
price rises above 200 florins. Now supply and demand balance 
each other. The price cannot rise above 200 florins, for in this 
case purchaser As will be eliminated, with the result that the 
competition between the sellers would lower the price; in the 
given case, the price could not even rise to 215 florins, for 
now there would be six sellers and only five purchasers. The 
resulting price will be somewhere between 210 and 215 florins. 
It follows, in the first place: the exchange will be effected 
“by the most exchange-capable competitors on both sides; 
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