Price theory

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The microeconomic price theory dedicated as part of the economic theory researching the prices and the price formation on the markets .


The objects of knowledge are the prices as well as their determinants and dependencies. Fundamental in price theory is the difference between market price and natural price.


Adam Smith and David Ricardo are considered to be the founders of the classical price theory for homogeneous bulk goods ( commodities ). Classical price theory is based, among other things, on the central assumptions that “homogeneous goods” exist and that there is complete market transparency . While the assumption of homogeneous goods quality differences excludes, is meant by the condition of complete market transparency, the complete information of the market participants on all relevant aspects of a good . John Elliot Cairnesbrought the classical price theory to a conclusion. The historical development of price theory ranges from the model of complete competition among the classics to the monopoly with Antoine-Augustin Cournot to the current problems of coalition formation. The more recent price theory, whose main interest, like that of classical price theory, is directed towards the derivation of an equilibrium price , is increasingly devoting itself to setting prices in connected markets.

Market forms and pricing

As part of microeconomics, it analyzes different forms of market ( polypol , oligopoly , dyopoly , monopoly , polypson , oligopsony and monopsony ) and their impact on price formation. Price theory also asks how price changes affect supply and demand .


Individual evidence

  1. Clemens Baum, Possibilities and Limits of the Development of a Macroeconomic Price Theory , 1974, p. 15