Opportunity Cost Classification of Goods and Markets
Sixty years ago, Samuelson’s “Pure Theory of Public Expenditure” expounded the classification of goods, and Bain’s “Economies of Scale, Concentration and the Condition of Entry in Twenty Manufacturing Industries” expounded the structure-conduct-performance paradigm. To the present day, rivalry in-...
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| Format: | Article |
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University of Ljubljana Press (Založba Univerze v Ljubljani)
2015-03-01
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| Series: | Central European Public Administration Review |
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| Online Access: | https://journals.uni-lj.si/CEPAR/article/view/20420 |
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| author | Davor Mance Nenad Vretenar Jana Katunar |
| author_facet | Davor Mance Nenad Vretenar Jana Katunar |
| author_sort | Davor Mance |
| collection | DOAJ |
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Sixty years ago, Samuelson’s “Pure Theory of Public Expenditure” expounded the classification of goods, and Bain’s “Economies of Scale, Concentration and the Condition of Entry in Twenty Manufacturing Industries” expounded the structure-conduct-performance paradigm. To the present day, rivalry in- and excludability from consumption classify goods, and subadditivity and irreversibility in production classify market structure. Opportunity costs of production in the form of prospective sunk costs incentivise investment and production, and the sunk costs themselves induce subadditivities, specialization and convexity of the marginal rate of technical substitution. Opportunity costs in consumption are determined by the marginal costs of replacement. In light of the recent Nobel price award to Jean Tirole, we revisit some of the forgotten discussions and clarify some of the terminology under a more economic framework of opportunity costs.
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| format | Article |
| id | doaj-art-8c2eb2d605804e949ce1e55ed1654f48 |
| institution | Kabale University |
| issn | 2591-2240 2591-2259 |
| language | English |
| publishDate | 2015-03-01 |
| publisher | University of Ljubljana Press (Založba Univerze v Ljubljani) |
| record_format | Article |
| series | Central European Public Administration Review |
| spelling | doaj-art-8c2eb2d605804e949ce1e55ed1654f482025-01-22T10:54:56ZengUniversity of Ljubljana Press (Založba Univerze v Ljubljani)Central European Public Administration Review2591-22402591-22592015-03-0113110.17573/ipar.2015.1.06Opportunity Cost Classification of Goods and MarketsDavor Mance0Nenad Vretenar1Jana Katunar2Faculty of Economics, University of RijekaFaculty of Economics, University of RijekaFaculty of Economics, University of Rijeka Sixty years ago, Samuelson’s “Pure Theory of Public Expenditure” expounded the classification of goods, and Bain’s “Economies of Scale, Concentration and the Condition of Entry in Twenty Manufacturing Industries” expounded the structure-conduct-performance paradigm. To the present day, rivalry in- and excludability from consumption classify goods, and subadditivity and irreversibility in production classify market structure. Opportunity costs of production in the form of prospective sunk costs incentivise investment and production, and the sunk costs themselves induce subadditivities, specialization and convexity of the marginal rate of technical substitution. Opportunity costs in consumption are determined by the marginal costs of replacement. In light of the recent Nobel price award to Jean Tirole, we revisit some of the forgotten discussions and clarify some of the terminology under a more economic framework of opportunity costs. https://journals.uni-lj.si/CEPAR/article/view/20420classification of goods and marketsopportunity costsprospective sunk costs |
| spellingShingle | Davor Mance Nenad Vretenar Jana Katunar Opportunity Cost Classification of Goods and Markets Central European Public Administration Review classification of goods and markets opportunity costs prospective sunk costs |
| title | Opportunity Cost Classification of Goods and Markets |
| title_full | Opportunity Cost Classification of Goods and Markets |
| title_fullStr | Opportunity Cost Classification of Goods and Markets |
| title_full_unstemmed | Opportunity Cost Classification of Goods and Markets |
| title_short | Opportunity Cost Classification of Goods and Markets |
| title_sort | opportunity cost classification of goods and markets |
| topic | classification of goods and markets opportunity costs prospective sunk costs |
| url | https://journals.uni-lj.si/CEPAR/article/view/20420 |
| work_keys_str_mv | AT davormance opportunitycostclassificationofgoodsandmarkets AT nenadvretenar opportunitycostclassificationofgoodsandmarkets AT janakatunar opportunitycostclassificationofgoodsandmarkets |