Economics Dictionary of ArgumentsHome
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| Marginal costs: Marginal cost is the cost incurred by producing one additional unit of a good or service. It is a critical concept in economics and business for determining the optimal production level and pricing strategies. Marginal cost includes all variable costs associated with production, such as materials and labor, and influences decisions on whether to expand or reduce production. See also Marginal utility, Marginal return, Price, Efficiency._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Piero Sraffa on Marginal costs - Dictionary of Arguments
Kurz I 79 Marginal costs/Sraffa/Kurz: (…) Sraffa’s emphasis that in an economic system in which production continues unchanged day after day the marginal product of a factor or the marginal cost of a commodity is not ‘there to be found’ may be interpreted as a warning for his readers: marginal products and marginal costs are theoretical objects and not observable objects. In fact, even in a stationary state the observer could calculate the marginal product of a factor or the marginal Kurz I 80 cost of a commodity provided that infinitesimal changes were assumed (counterfactually); but obviously no observer could experience them. Things are different with respect to what Wicksteed called ‘spurious margins’: ‘The most familiar case is that of the product of the “marginal land” in agriculture, when lands of different qualities are cultivated side by side’ (Sraffa, 1960: v)(1). In this case two different objects are experienced by the observer and the difference between the two objects defines the increments implicit in the concept of margin. This concept of margin was actually introduced by classical economists. Sraffa reminds us that ‘P.H. Wicksteed, the purist of marginal theory … condemns such a use of the term “marginal” as a source of “dire confusion’” (ibid.). 1. Sraffa, P. (1960). Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory, Cambridge: Cambridge University Press. Salvadori, Neri and Signorino, Rodolfo. 2015. „Piero Sraffa: economic reality, the economist and economic theory. An interpretation.“ In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Sraffa I Piero Sraffa Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory (Cambridge: Cambridge University Press). Cambridge 1960 Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 |
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