Sellers Market One

Sellers Market One

Sellers' Market, one in which sellers hold the stronger strategic position of bargaining advantage because buyers are prepared to buy, at existing prices, larger amounts of goods than sellers are currently able to produce or prepared to market. Sellers' markets may be caused by increases in demand for durable commodities whose existing supplies can increase only very slowly (e.g. houses), or for commodities which are themselves produced with specialized equipment that takes time to produce, or because of misplanned production or output deficiencies (e.g. crop failures). Manufacturers' stocks are then run down, prices forced up and abnormal profits earned until output is increased or demand falls away. When demand grows continuously, capacity may lag for many years; but the duration of a sellers' market usually depends upon the nobility of factors of production, theft degree of specialization, and the time needed to bring new plant into use. A sellers' market in hula hoops would be dissipated quickly by an influx of plastic extruders; a sellers' market in oil products might persist for ten years whilst additional production, transportation and refinery facilities were built.

All markets may be converted into sellers' markets by a general excess demand caused by monetary inflation. At such times men and resources are fully employed and output can be increased only with additional capacity created by investment and improved methods. Whilst it is taking place investment diverts resources from current production, and when completed it only partly offsets excess demand because the resulting increase in real income reinforces demand further. During a continuing inflation stocks of goods may be accumulated beyond current requirements as a hedge against rising prices and so the sellers' markets may be strengthened further.

Senior, Nassau William (1790-1864), English economist Educated at Eton and Oxford University; he was called to the bar in i8,g and appointed a Master in Chancery in 1836. In 1825 he was appointed Drummond Professor of Political Economy at Oxford.

Senior was active in both the academic world and in the affairs of government , serving on several royal commissions. In his main works, Introductory Lectures on Political Economy and An Outline of the Science of Political Economy (1836), he stated his views on the scope and method of political economy, which he regarded as a purely deductive science. His work places him as one of the founders of pine economics.

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