Markup Pricing and the Aggregate Supply Relationship

Basil John Moore

Chapter 12 in Shaking the Invisible Hand, 2006, pp 261-280 from Palgrave Macmillan

Abstract: Abstract Neoclassical theory is based on the assumption that all individual economic agents are rational utility-maximizers. Agents are not assumed to have perfect information. But they are assumed to be able to form objective probability distributions of all unknown future states of the world. If they can do this they must simply select the alternative with the highest expected outcome to maximize utility.1 The binding constraint on economic agents stems from the ultimate fact that resources are scarce relative to wants. “Scarcity” is the central problem of economics.

Keywords: Price Adjustment; Unit Labor Cost; Coordination Failure; Implicit Contract; Price Rigidity (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-51213-9_12

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DOI: 10.1057/9780230512139_12

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