the marginalcostprice equation are unimportant to its functioning. And because, as a first approximation, money revenue is regarded as the entrepreneur's single aim, this outcome would be good thesis for fate an alternative money revenue. It is not sufficient, however, to assume that the decision-making is performed by individual people whose decisions are coordinated with those of other people only through the medium of the market. Admittedly it is not possible to establish such a relationship with absolute accuracy, nor would it be possible to bring additional cost and additional revenue to complete equality without much Edition: current; Page: 82 expense. The line drawn by accountants between prime or direct cost and overhead or indirect cost is therefore arbitrary.
Oportunitu cost and market essay
In this regard of course public utilities differ from other industries only in that they are more likely to become the subject of government policy for other reasons, and in that they provide a convenient method of achieving those indirect income redistributions that some economists. Ii: the place and significance of cost in a philosophy of business administration The subjectivist sees the whole direction of resources to ends as a continuous selection between alternatives, guided throughout by a weighing of the significance of the anticipated results, in which the cost. I have said, then, that the man adopts one particular distribution of the same resources as his plan or accepted course Edition: current; Page: 211 of action, and that this plan will contemplate the use, for the purpose of earning revenue, of some or all. We have explained the possibility of Edition: current; Page: 35 diminshing costs in this sense by invoking the existence of indivisibility in the methods of production. Iv: the rule as reformulated If no rule other than the marginal cost rule is used, and that rule is interpreted as a relationship between budgeted marginal cost (as defined) and budgeted price, is there any check on the efficiency of the distribution of resources. Opportunity-costs, however, will continue in such a case to fluctuate with price movements on the open market. Marginal social cost, enthroned by Pigou as a corner-stone of applied welfare economics, was successfully challenged by Edition: current; Page:. Can it combine its resources in such a way as to lower the total resources required? Beyond inspiring fear ex ante, and applying any sanctions ex post, the Ruler would apparently have no function but to see whether cost and revenue in the sense of realized money outlays and revenuessubject to adjustments for opening stock and closing stock or residual assetswere. The asset should be created if any plan shows a potential (ex ante) excess of revenues over outlays. These are based on the generally implied assumption that overhead expenses vary with time.
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