whatever may be the ways in which the prices of different commodities are first established or fixed in relation to one another , the law of value governs their movement . When the labor-time required for their production falls , prices [ of production ] fall , and where it rises , prices [ of production ] rise , as long as other circumstances remain equal .[ 46 ]
For Marx , prices of production are influenced via changes in the parameters of socially necessary labortime , which makes production prices rise and / or fall , however , the mechanism of socially necessary labortime is relatively stable over time , thus , for Marx , as well are prices of production . In fact , price of production is the stable tether , within a sphere of production , between spheres of production and across society , in general , by which the seeming anarchy of market prices , brought about by fluctuations of all types and kinds , pertaining to supply and demand , are in the end stabilized and made predictable . As Marx states , “ the various different values … balance out into production prices and the various production prices into a [ social ] general production price that governs the [ total ] market ”[ 47 ]. From Marx ’ s perspective , all individual prices of production within individual spheres , together , form a general totalizing price of production that is applicable across all markets within capitalist society , regulating all the anarchy of all market prices towards a generalized societal market value .
By and large , for Marx , prices of production have longevity and tend to remain steady in the long-run , exercising a stabilizing and equalizing influence on the anarchy of market prices . On the other hand , for Marx , market prices are subject to the constant fluctuations of supply and demand , and other varying factors , which always destabilize market prices , driving them up and driving them down chaotically . However , according to Marx , these fluctuations tend to occur within a stable range , a stable range predicated on the pillars of prices of production , namely that “ prices of production [ are ]… the centres around which market prices fluctuate ”[ 48 ]. Market prices are the everyday prices of things , commodities and / or services , “ the concept of market price means that the same price is paid for all commodities of the same kind , even if these are produced under … different condition and … different cost prices ”[ 49 ]. Market prices constantly change , due to the fact that market prices are subject to the vagaries of supply and demand , as Marx states “ market price ... is [ only ] fixed at any given [ point ] by demand and supply ”[ 50 ], which is itself stabilized and fixed via a specific price of production . In this regard , market prices fluctuate up and down , depending on supply and demand , but tend , according to Marx , to remain near their general market value , i . e . price of production , “ market value [ that is price of production ]… forms the centre around which market prices fluctuate — these being the same for all commodities of the same species ”[ 51 ]. The centers of market values set the limits of market price fluctuations . It is important to mention that , for Marx , price of production and market value are synonymous , they are interchangeable concepts in the sense that :
Market value [ is ] distinct from the individual value of particular commodities produced by ... different producers . The individual value of some of these commodities will stand below the market value ( i . e . less labor-time has been required for their production than the market value expresses ), the value of others above it . Market value is to be viewed on the one hand as the average value of the commodities produced in a particular sphere , [ i . e . price of production ,] and on the other hand as the individual value of commodities produced under average conditions in the sphere in question , and forming the great mass of its commodities .[ 52 ]
Market values , or prices of production , only fluctuate due to the applied pressures of socially necessary labor-time , namely , as the socially necessary labor-time within a specific sphere of production fluctuates , due to competition and improvements in technology , so do market values , i . e . prices of production , fluctuate in turn .