13-9e The emergence of new types of goods will bring about price decrease for old substitutes because of the shift in demand schedules, under the assumptions of constant supply schedules

The emergence of new types of goods will bring about price decrease for old substitutes because of the leftward shift of demand schedules, under the assumptions of constant supply schedules and the stock of money

When the demand schedules shift, the price decrease can only mean total revenue decrease regardless of the elasticity of the demand schedules for these old substitutes, under the assumptions of constant supply schedules for these goods and constant money supply.

“When new types of goods are established on the market, these will clearly draw monetary demand away from other, substitute products. More money spent on good A, given the stock of money, signifies that less money is spent on goods B, C, D … The demand curves for the latter goods “shift to the left,” and the prices of these goods fall.”

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13-9f The elasticity of demand per se has also no relevance for complementing goods (e.g., golf balls) as it relates to its complementary effect to the complemented (e.g., golf clubs)

Related:

• The establishment of equilibrium price for new goods takes time—the price of new goods are volatile
  • 13-1a3a2e5 Time component in prices emerges with the introduction of money