Munich Personal RePEc Archive

Full cost, profit et concurrence

Jael, Paul (2014): Full cost, profit et concurrence.

[img]
Preview
PDF
MPRA_paper_64406.pdf

Download (250kB) | Preview

Abstract

During the marginalist controversy, full costers failed to convince economists of the superiority of full cost pricing over marginal theory of imperfect competition. The controversy was closed prematurely; various contributions published immediately thereafter in the fifties did not renew the debate despite their relevance. Topics included entry prevention, target rate of profit and the emergence of the market price.

The present paper shows that the full cost pricing is not so justified by the need for a rule of thumb than as a rational behaviour aiming at long term profit maximisation, especially in the case of highly competitive markets with few suppliers. The paper focuses also on the relationship between full cost pricing and changes in demand (mostly cyclical). It is also shown that the race for performance deserves a central position in the analysis of competition; it is too often neglected in favour of the sole competition on margins.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.