• 00:00    |    
    Initial credits
  • 00:20    |    
    Introduction by Mónica de Zelaya
  • 01:02    |    
    Conference outline by Israel Kirzner
  • 02:07    |    
    Law of supply and demand
    • Graphic
    • Three main propositions
      • Market prices
      • Increases in demand
      • Increases in supply
    • The invisible hand
    • Quotes Adam Smith
    • Prices of supply and demand
    • Government's interaction with the law of supply and demand
    • Impact of the law
  • 11:29    |    
    Austrian perspective of the law of supply and demand
    • Why and how does this law really work?
    • Surplus
    • Shortage
  • 14:05    |    
    Contributions of Friedrich A. Hayek
    • Knowledge
    • Correct mutual anticipation
    • Incorrect mutual anticipation
    • Correct mutual knowledge
    • Disequilibrium
    • Ensuring the fulfillment of supply and demand
      • Imperfect knowledge
      • Perfect knowledge
      • Setting prices through subjective utility
    • Concept of market error
    • Two kinds of errors
    • Errors of overoptimism
      • By the buyer
      • By the seller
      • Disappointment
      • Learning
    • Errors of overpessimism
      • By the seller
      • By the buyer
      • Results of overpessimism
  • 47:03    |    
    Secret of the law of supply and demand
  • 50:50    |    
    Quotes n , Friedrich A. Hayek
  • 51:25    |    
    Freedom of markets
  • 54:30    |    
    Opportunities for entrepreneurs
  • 55:46    |    
  • 57:10    |    
    Question and answer period
  • How does supply and demand work for a monopolist market?
  • 01:03:06    |    
    Final credits

The Law of Supply and Demand: A Reconsideration

New Media  | 01 de agosto de 1996  | Vistas: 63

Israel Kirzner explains one of the basic elements of economics: the law of supply and demand, as well as the model for price determination in a market and elaborates on why and how, viewed from an Austrian perspective, this economic model works.

He refers to Friedrich A. Hayek's insight on equilibrium and disequilibrium, indicating that the first term refers to a situation in which every market participant correctly anticipates what every other member involved will do, contrary to the incomplete and incorrect mutual anticipation that is disequilibrium.

Kirzner also tells about the two kinds of errors present in the market, overoptimism, referring to seeing something that is not there, which leads to disappointment, shortage, and surplus; and overpessimism, which means a failure to see something that was really there and has, as an outcome, two or more prices.

He closes by stating that the market process is one of spontaneous learning, correction of error, and of mutual coordination.


Israel Kirzner is a leading economist of the Austrian School of…


Nuestra misión es la enseñanza y difusión de los principios éticos, jurídicos y económicos de una sociedad de personas libres y responsables.

Universidad Francisco Marroquín