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. It considers to what extent average cost and marginal cost pricing rules characterize Marshall’s competitive partial equilibrium, and it shows that the two rules differ for origins and can be reconciled only with great difficulty in a general equilibrium framework.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6053.
Date of creation: Sep 2007
Date of revision:
Marshall; classical competition; perfect competition; marginal and average cost;
Other versions of this item:
- Luca Zamparelli, 2009. "Average cost and marginal cost pricing in Marshall: Textual analysis and interpretation," European Journal of the History of Economic Thought, Taylor and Francis Journals, vol. 16(4), pages 665-694.
- 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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- George J. Stigler, 1957. "Perfect Competition, Historically Contemplated," Journal of Political Economy, University of Chicago Press, vol. 65, pages 1.
- Hart, Neil, 1996. "Marshall's Theory of Value: The Role of External Economies," Cambridge Journal of Economics, Oxford University Press, vol. 20(3), pages 353-69, May.
- Paul J. McNulty, 1967. "A Note on the History of Perfect Competition," Journal of Political Economy, University of Chicago Press, vol. 75, pages 395.
- Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution: Reply," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 439, July.
- Ekelund, Robert B, Jr & Hebert, Robert F, 1999. "The Dupuit-Marshall Theory of Competitive Equilibrium," Economica, London School of Economics and Political Science, vol. 66(262), pages 225-40, May.
- Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 407-36, July.
- Harris, Donald J, 1988. "On the Classical Theory of Competition," Cambridge Journal of Economics, Oxford University Press, vol. 12(1), pages 139-67, March.
- 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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