Average cost and marginal cost pricing in Marshall: Textual analysis and interpretation
AbstractThis paper proposes a textual analysis of Marshall's theory of firm pricing behavior under competitive conditions. Average cost and marginal cost pricing theories have very distinct origins as they are rooted, respectively, in the classical and marginalistic theory of competition. I analyze to what extent and under which circumstances the two theories joined in the work of Alfred Marshall; and I argue that, even though only partial evidence can be found to support the adoption of the notion of marginal cost pricing by Marshall, he developed some concepts, such as the distinction between short and long periods and the notion of quasi-rents, which turned out to be fundamental for the joint acceptance of marginal cost and average cost pricing principles by the Marshallian school.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The European Journal of the History of Economic Thought.
Volume (Year): 16 (2009)
Issue (Month): 4 ()
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Web page: http://www.tandfonline.com/REJH20
Other versions of this item:
- zamparelli, luca, 2007. "Average Cost and Marginal Cost Pricing in Marshall: Textual Analysis and Interpretation," MPRA Paper 6053, University Library of Munich, Germany.
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
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- Oggioni, Giorgia & Smeers, Yves, 2012. "Evaluating the application of different pricing regimes and low carbon investments in the European electricity market," Energy Economics, Elsevier, vol. 34(5), pages 1356-1369.
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