Economics knowledge, prices fluctuate around the law of value! Explain why the same product has different prices! ?

In order to make the law of value have greater explanatory power, Marx also attributed the phenomenon of price deviation from value to the scope of the law of value. For example, for an item worth 10 yuan, its price is sometimes 12 yuan (or even higher), sometimes 8 yuan (or even lower). These are just a manifestation of the volatility of value determining price --- -Although people are full of doubts about this, especially when the volatility is too high.

But apart from pointing out that price can fluctuate to a certain extent around value, Marx does not seem to have a more in-depth explanation of this, that is, why does the law of value manifest itself in such fluctuations? Many people, however, simply abandon the law of value because it allows such fluctuations, and want to use pure supply and demand (the law of supply and demand) to explain price changes.

What is the actual situation? How do we understand and explain this deviation from the law of value?

The meaning of value in the law of value is actually "cost consumption", which is what Marx called "the condensation of abstract labor". It is actually what is commonly called "cost". The greater the consumption, the higher the cost. The bigger. So prices fluctuating around the value become prices fluctuating around the cost of the product. From this we can obtain the most reasonable and interesting explanation of price fluctuations around value.

When the price of a product is greater than its cost (including the cost of actual labor consumption), excess profits will be generated. The existence of this excess profit will stimulate the increase in supply, thereby causing prices to tend to decline. On the contrary, when the price of a product is lower than its cost, resulting in a loss, the supply decreases, causing the price to rise.

Such a simple explanation can explain the phenomenon of price fluctuations around value. It is actually another form of market supply and demand. Therefore, Marx's law of value and the price volatility it contains are consistent with the relationship between supply and demand, and there is no contradiction. The law of value determines the relationship between supply and demand. In turn, we can also use the relationship between supply and demand to explain the law of value.

Here, value, that is, cost, can be either individual value, that is, individual cost, or social value (market value), that is, social cost.

Western market economics has the concepts of "equilibrium" and "disequilibrium". Equilibrium is a market state where price equals value. Disequilibrium is a state when prices deviate from value and fluctuate up and down. The disequilibrium state has a tendency to return to the equilibrium state. Of course, these can only be established in a fully competitive market.