Market Theory and the Price System

by Israel M. Kirzner, Frédéric Sautet (Editor), Peter J. Boettke (Editor)

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 University Professor of Economics and Philosophy at George Mason University and 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.

Please note: This title is available as an ebook for purchase on Amazon, Barnes and Noble, and iTunes.

Product Details

ISBN-13:	9781614872528
Publisher:	Liberty Fund, Incorporated
Publication date:	05/24/2011
Series:	The Collected Works of Israel M. Kirzner , #2
Sold by:	Barnes & Noble
Format:	eBook
Pages:	372
File size:	950 KB
Age Range:	18 Years

Table of Contents

Introduction to the Liberty Fund Edition
by Peter J. Boettke and Frédéric Sautet xiPreface xvii1. 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 / Summary2. 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 / Summary3. 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 / Summary4. 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 / Summary5. 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 / Summary6. MARKET DEMAND 92
Market Demand / The Market Demand Curve / Demand Elasticity / Measure 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 / Summary7. 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 Sustainability 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 / Summary9. 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 / Summary10. 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 ProductThe Market for a Single Factor of Production
Equilibrium in a Factor Market / The Market Process in a Market for a Single Factor of ProductionToward the General Market Process
Summary11. 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 / Summary12. 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 / Summary13. 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 / SummaryAPPENDIX: 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 ProductionIndex 347