The lesson is to beware of neoclassical re-interpretations of administered pricing.
One must not confuse the neoclassical concept of marginal costs with average costs of production per unit. The two are not the same thing.
And, above all, the administered pricing behaviour of many firms is inconsistent with the idea of profit-maximisation in neoclassical theory.
Social Democracy For The 21St Century: A Post Keynesian Perspective
Lavoie on Mark-up Pricing in Neoclassical Theory
Lord Keynes
Lavoie on Mark-up Pricing in Neoclassical Theory
Lord Keynes
1 comment:
It's not at all surprising that neoclassical economic theory fails since it ignores, like nearly everyone else, the government-backed counterfeiting cartel.
It's almost like the banks fund most economists since one does not bite the hand that feeds one, does one?
For the record, no one funds or has ever funded any of my writing.
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