Business Forecasting: The Principles and Practice of Forecasting Business and Stock-Market Trends with Especial Reference to Business Cycles

By Lewis H. Haney | Go to book overview

VIII
The P/V Line: An Application of the Theory of Value to Business Forecasting

General Theory

Prices are determined by three factors: (1) demand intensity (Di), (2) supply pressure, or supply resistance (Sr), and (3) physical volume of supply (V). Price (P) depends upon the relative force or strength of these three. As V varies, it registers a varying P, dependent on the intensity of demand and the resistance of sellers to price declines.

Therefore if we eliminate the effect of the volume factor (V) from prices (P), we have left the relation between Di and Sr. This elimination we can effect, just as we eliminate the seasonal factor from a time series of index numbers. In other words, by adjusting a price series for variation in physical volume we arrive at a series which is neither price nor volume, a series which shows the varying relations between the price- determining forces of demand and supply.

This series is the basis of the "P/V line." The P/V line is a commodity price curve adjusted for variations in physical volume, or a series of ratios between price and volume.

This reasoning is valid for a single commodity; and since indexes of prices and volumes are averages of individual commodities, it can also be applied to the general situation as reflected in such indexes.

The P/V line, by showing the changing trend in the relation between demand and supply, enables us to anticipate the trend of the general price level as measured by price indexes and to know more certainly in what phase of the business cycle we lie at any given time.

-171-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Business Forecasting: The Principles and Practice of Forecasting Business and Stock-Market Trends with Especial Reference to Business Cycles
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 380

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.