## 1.2 Desired OutputAs an output, the Ampleforth protocol seeks to reflect demand changes in quantity rather than price. Let's walk through a simple example: Imagine Alice purchases 1 Ample for $1. Demand suddenly increases, and she now has 1 Ample worth $2. In the case above, the system will seek a price-supply equilibrium, such that Alice ends up with 2 Amples each worth $1. And the opposite is true when demand decreases. Continuing from the example above: Imagine Alice has 2 Amples each worth $1. Demand suddenly decreases, and she now has 2 Amples each worth $0.50. Similarly in this case, the system will seek a price-supply equilibrium such that Alice ends up with 1 Ample worth $1. **It applies countercyclical pressures****It encourages a stable unit price**
We'll talk more about the importance of these benefits in course 2, which speaks to Ampleforth in a broader economic context. |