2. Exchange and Demand

All action is exchange, even forced exchange like slavery, taxes, eminent domain and conscription, where only one party gains. The Law of Marginal Utility tells us how many exchanges will be made. Demand is elastic if when you cut your price, demand goes up. Demand is inelastic when revenues remain strong even though prices have been raised. Consumers want that good at almost any price, as experienced with tobacco sales and hot items that consumers perceive as desirable. The second of ten lectures from Joseph Salerno's Introduction to Austrian Economic Analysis seminar.