Market Theory and the Price System
The second volume in Liberty Fund’s Collected Works of Israel M. Kirzner series, Market Theory and the Price System was published in 1963 as Kirzner’s first (and only) textbook. This volume presents an integrated view of Austrian price theory. The basic aim of Market Theory is to utilize the tools of economic reasoning to explain the market process. The unique framework Kirzner develops for microeconomic analysis, following Mises and Hayek, examines errors in decision-making, entrepreneurial profit, and competition as a process of discovery and learning.

Israel M. Kirzner is a leading economist in the Austrian School and Professor Emeritus of Economics at New York University.

Peter J. Boettke is UniversityProfessor of Economics and Philosophy at George Mason Universityand the BB&T Professor for the Study of Capitalism at the Mercatus Center.

Frédéric Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine.

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Market Theory and the Price System
The second volume in Liberty Fund’s Collected Works of Israel M. Kirzner series, Market Theory and the Price System was published in 1963 as Kirzner’s first (and only) textbook. This volume presents an integrated view of Austrian price theory. The basic aim of Market Theory is to utilize the tools of economic reasoning to explain the market process. The unique framework Kirzner develops for microeconomic analysis, following Mises and Hayek, examines errors in decision-making, entrepreneurial profit, and competition as a process of discovery and learning.

Israel M. Kirzner is a leading economist in the Austrian School and Professor Emeritus of Economics at New York University.

Peter J. Boettke is UniversityProfessor of Economics and Philosophy at George Mason Universityand the BB&T Professor for the Study of Capitalism at the Mercatus Center.

Frédéric Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine.

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Market Theory and the Price System

Market Theory and the Price System

Market Theory and the Price System

Market Theory and the Price System

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Overview

The second volume in Liberty Fund’s Collected Works of Israel M. Kirzner series, Market Theory and the Price System was published in 1963 as Kirzner’s first (and only) textbook. This volume presents an integrated view of Austrian price theory. The basic aim of Market Theory is to utilize the tools of economic reasoning to explain the market process. The unique framework Kirzner develops for microeconomic analysis, following Mises and Hayek, examines errors in decision-making, entrepreneurial profit, and competition as a process of discovery and learning.

Israel M. Kirzner is a leading economist in the Austrian School and Professor Emeritus of Economics at New York University.

Peter J. Boettke is UniversityProfessor of Economics and Philosophy at George Mason Universityand the BB&T Professor for the Study of Capitalism at the Mercatus Center.

Frédéric Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine.


Product Details

ISBN-13: 9780865977600
Publisher: Liberty Fund, Incorporated
Publication date: 05/24/2011
Series: The Collected Works of Israel M. Kirzner , #2
Pages: 372
Product dimensions: 6.00(w) x 9.00(h) x 1.00(d)
Age Range: 18 Years

Table of Contents

Introduction to the Liberty Fund Edition Peter J. Boettke Frédéric Sautet xi

Preface xvii

1 The Nature and Tasks of Market Theory 1

The Individual and the Market

The Market System

The Foundations of Market Theory

The Individual and Economic Behavior

Economic Theory and Economic Reality

Market Theory, Economic Theory, and Economics

Summary

2 The Market: Its Structure and Operation 14

The Conditions Under Which the Market Operates

Market Roles

The Structure of the Market System: Vertical Relationships

The Structure of the Market System: Horizontal Relationships

The Analysis of Human Action in the Market: The Concept of Equilibrium

Complete and Incomplete Equilibrium

The Pattern of Market Adjustment

The Changing Market

The Market System as a Whole

Summary

3 Efficiency, Coordination, and the Market Economy 35

The Economic Problem

Society and the Economic Problem

The Problem of Coordination

How the Market Solves the Problems of Coordination

The Coordinating Function of Profits in a Market Economy

Summary

4 Utility Theory 48

The Scale of Values

Marginal Utility

Diminishing Marginal Utility

The Marginal Utilities of Related Goods

Marginal Utility-Some Further Remarks

Marginal Utility and the Conditions for Exchange

Summary

5 Consumer Income Allocation 68

Marginal Utility and the Allocation of Income

The Position of Consumer's Equilibrium

A Geometrical Illustration

The Effects of Changes

The Individual Demand Curve

Some Remarks on Expectations

Summary

6 Market Demand 92

Market Demand

The Market Demand Curve

Demand Elasticity

Measures of Elasticity

Market Demand as Seen by the Individual Entrepreneur

Demand and Revenue

Demand and the Prices of Other Goods

Demand as a Market Force

Summary

7 Market Process in a Pure Exchange Economy 113

The Nature of Competition

A Simple Case of Price Competition

Simple Price Competition Without Perfect Knowledge

The Market for Several Non-Producible Goods: The Problem

The Equilibrium Situation for the Multi-Commodity Market

The Multi-Commodity Market Without Perfect Knowledge

Monopoly in a Pure Exchange Market

The Agitation of the Market

Summary

Appendix

8 Production Theory 153

The Economic Aspect of Production

Production by the Isolated Individual

Production in Society

Production in the Market Economy

Factors of Production

Production Functions and Isoquants

The Shape of the Isoquant and the Substitutability of Factors

Changes in Factor Proportions, and Changes in the Scale of Factor Employment

Returns to Scale

The Laws of Variable Proportions: The Problem

The Laws of Variable Proportions

Economic Implications of the Laws of Variable Proportions

The Least-Cost Combination

Graphic Illustration of the Least-Cost Combination

Summary

9 Costs and Supply 197

Costs and Rents

Opportunity Costs and Supply Theory

Prospective and Retrospective Costs

Capital Goods and Cost Theory

Factor Divisibility and Short-Run Per-Unit Costs

Short-Run Costs and Their Effect on Supply

Long-Run Costs and Supply

Factor Prices and Supply

Summary

10 Partial Market Processes-The Determination of Product Prices and Factor Prices 227

The Market for a Single Product

Long-Run Equilibrium

Short-Run Equilibrium in the Single-Product Market

Equilibrium in the Single-Product Market in the Very Short Run

Adjustment to Change in a Market for a Single Product

The Market Process in a Market for a Single Product

The Market for a Single Factor of Production Equilibrium in a Factor Market

The Market Process in a Market for a Single Factor of Production

Toward the General Market Process

Summary

11 The General Market Process 255

A Preliminary Model

The Preliminary Model and the General Model

General Market Equilibrium Conditions

A General Market in Disequilibrium

Disequilibrium in the General Market and Entrepreneurial Opportunities

Entrepreneurial Activity and the General Market Process

Partial Analysis and the Analysis of a General Market

Toward Further Extensions of the General Market Model

Summary

12 Monopoly and Competition in the General Market 286

The Monopolized Resource

The Resource Cartel

Restriction of Supply: A Special Case

Combinations of Resource Buyers

Monopoly in Production

The Consequences of Monopoly Output Restriction

The Monopolist-Producer as a Resource Buyer

Further Remarks on Monopolized Products

The Single Producer Without Monopoly

Some Remarks on the Model of "Pure" or "Perfect " Competition

Monopolistic Price Discrimination

Summary

13 The Price System and the Allocation of Resources 321

The Possible Levels of "Welfare" Appraisal

Misallocation of a Resource in a Market System

Imperfect Knowledge, the Source of Resource Misallocation

Prices, Profits, and the Reallocation of Resources

The Entrepreneur and Resource Allocation

Resource Mobility and the Allocation Pattern

Monopoly as an Obstacle to Correct Resource Allocation

Artificial Obstacles to Correct Resource Allocation

Summary

Appendix: The Application of Market Theory to Multi-Period Planning 335

Multi-Period Decisions in the Pure Exchange Economy

The Intertemporal Market

Speculation as an Aspect of Intertemporal Markets

Multi-Period Decisions of Producers

The Place of Capital Goods in Production

Index 347

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