This article is
the first article in the world, which is written in the meta-language. *
3 Market life cycle
We will use the standard schedule of supply and demand
for the market analysis. Supply and demand lines are crossed in a point of
balance of the market.
Let's assume that the market is in A. Point A is to the left of a balance point,
below a line of demand and above an offer line. The market point is below a
demand line, the buyers are more happy. The market point is above a demand
line, the manufacturers are more happy. Distance А1-А2 is
proportional to satisfaction which is received by the buyer and the
manufacturer from sale of one product. Therefore distance А1-А2 is
proportional to volume of entropy which is received by the buyer and the
manufacturer from sale of one product or service. Product of distance А1-А2 on volume
of output proportionally volume of
entropy which receives a society.
We will study volume of entropy which the market gives
to a society. We will not find out volumes of entropy which receives
manufacturers separately. And we will not find out volumes of entropy which are
received by buyers separately. Each person in a society is the buyer and the
seller simultaneously. It is important to us to know volume of entropy which
receives a society as a whole.
Market will move to a point of balance in the
conditions of a competition. The market stops in a balance point. A balance
point – the worst point of the market. Buyers and manufacturers have the
minimum satisfaction in this point. The price will a little increase - buyers
will refuse purchase. The price will a little decrease – manufacturers will
refuse purchase. In this point the market makes the minimum volume of entropy.
Let's consider market life cycle in other
co-ordinates. X- axis - time, Y-axis - entropy volume.
At first it is necessary to spend certain volume of
entropy (I). Then the entropy volume starts to grow (II). The entropy volume
reaches a maximum through any time (M). Then the volume of entropy which makes
the market, decreases (III). The market reaches balance points through any time
(B). After that the entropy volume does not change, if demand (IV) does not
change.
The more absolutely the competition, the faster the
market reaches balance points. We will assume that the market instantly appears
in a balance point. In this case the market makes an entropy minimum. An
example of such market – small online services. The markets with a perfect
competition influence economy and society development a little. Therefore
restriction of volume of release can increase entropy which makes the market.
To limit growth of volume of release it is possible in
several ways. The first way - monopoly. If the enterprise is a monopolist in
the market the enterprise can reduce output volume. However the monopolist will
rise the price, most likely. The new price will be above "the fair"
price. The fair price - the price at which the buyer and the manufacturer
receive identical volume of entropy.
Еxchange
law – all participants of an exchange receive identical quantity of entropy, on
long-term intervals. The law can be broken on short-term intervals. The
processes and the information in economy and a society are more free, the is
less deviations from this law.
Let's assume, the monopolist establishes the prices,
which above the fair prices. If the price is unfair, the enterprise should
spend additional efforts for maintenance of a monopoly position and decrease of
public discontent. Costs increase. The offer line rises, entropy of a
monopolist will decrease. The exchange law will be executed. Such market makes
entropy a little. For the same reason arrangement of manufacturers on price
increase is inefficient too.
If the monopolist kept the fair prices and limited
release volume the entropy volume could be maximum. But in the conditions of
monopoly it is almost impossible to define size of the fair price. And the
monopolist will want to rise the price above the fair price, most likely.
Second way of restriction of volume of release is the
establishment of quotas. Quotas should establish either the state, or the
companies. But it is difficult to distribute quotas for a considerable quantity
of the companies.
Third way of restriction of volume of release -
informing of a society on profit which is received by the various markets. When
the market will reach an entropy maximum, the market profit will start to fall.
Now the market will move to a point of balance and the entropy volume will
decrease. If all companies are informed on it they will not enter this market.
This information will limit release volume. Reduction of profit of the market
signals about reduction of volume of entropy. Between money and volume of
entropy we will consider interrelation in other sections.
I consider that the third way of restriction of volume
of release - more effective.
If to slow down movement of the markets to a balance
point they will create more volume of entropy. The markets create more entropy,
there are new markets. Because entropy – criterion of freedom and development.
If market movement to a balance point stops, manufacturers can receive
superprofit, and buyers keep unsatisfied desire. Therefore manufacturers have
an opportunity to create the new markets, and buyers keep desire for creation
of new demand.
to be continued ….
* Meta-language is - a special structure of the text,
which is translated by an automatic translator without loss of meaning.
P.S. This article is a very small part of my new
economic theory.
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