Say's Law Of Market: Proposition, Implication And Criticism?
Say’s Law is the main economic environment of the entire economic Theory. ”Supply creates it’s on demand”
INTRODUCTION
The Say’s Law was named after Jean-Baptiste Say at times credited to him as he was discussing it but did not originate from him.
Say’s law is an economic rule that states that every production is a source of demand. According to the law, a person produces products or services and gets paid for them and in return he or she is able to use the income or pay to buy or demand other goods and services.
The Say’s Law of Market: Proposition, Implication and Criticism he Say’s Law of Market: Proposition, Implication and Criticism!
Say’s Law:
Say’s law of markets is the core of the classical theory of employment. An early 19th century …show more content…
In short, it is only under free competition that the tendency of the economic system is to provide automatically full employment in the labour market.
Propositions and Implications of the Law:
Say’s propositions and its implications present the true picture of the market law.
These are given below:
1. Full Employment in the Economy:
The law is based on the proposition that there is full employment in the economy. Increase in production means more employment to the factors of production. Production continues to increase until the level of full employment is reached. Under such a situation, the level of production will be maximum.
2. Proper Utilization of Resources:
If there is full employment in the economy, idle resources will be properly utilized which will further help to produce more and also generate more income.
3. Perfect Competition:
Say’s law of market is based on the proposition of perfect competition in labour and product markets.
Other conditions of perfect competition are given below:
(a) Size of the Market:
According to Say’s law, the size of the market is large enough to create demand for goods. Moreover, the size of the market is also influenced by the forces of demand and supply of various inputs.
(b) Automatic Adjustment
INTRODUCTION
The Say’s Law was named after Jean-Baptiste Say at times credited to him as he was discussing it but did not originate from him.
Say’s law is an economic rule that states that every production is a source of demand. According to the law, a person produces products or services and gets paid for them and in return he or she is able to use the income or pay to buy or demand other goods and services.
The Say’s Law of Market: Proposition, Implication and Criticism he Say’s Law of Market: Proposition, Implication and Criticism!
Say’s Law:
Say’s law of markets is the core of the classical theory of employment. An early 19th century …show more content…
In short, it is only under free competition that the tendency of the economic system is to provide automatically full employment in the labour market.
Propositions and Implications of the Law:
Say’s propositions and its implications present the true picture of the market law.
These are given below:
1. Full Employment in the Economy:
The law is based on the proposition that there is full employment in the economy. Increase in production means more employment to the factors of production. Production continues to increase until the level of full employment is reached. Under such a situation, the level of production will be maximum.
2. Proper Utilization of Resources:
If there is full employment in the economy, idle resources will be properly utilized which will further help to produce more and also generate more income.
3. Perfect Competition:
Say’s law of market is based on the proposition of perfect competition in labour and product markets.
Other conditions of perfect competition are given below:
(a) Size of the Market:
According to Say’s law, the size of the market is large enough to create demand for goods. Moreover, the size of the market is also influenced by the forces of demand and supply of various inputs.
(b) Automatic Adjustment