Market Theory and the Price System
Publication Year: 2012
Published by: Liberty Fund
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Title Page, Copyright
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Introduction to the Liberty Fund Edition
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Market Theory and the Price System was published in 1963 as Professor Israel M. Kirzner’s first (and only) textbook. It was also his second book publication after that of The Economic Point of View, three years earlier. Market Theory and the Price System tackles the common subject...
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During the past few years a number of competently written textbooks on price theory have appeared. The author’s excuse for adding yet another book to the elementary literature in this field is that his approach, while in no sense original, presents the subject in an entirely different...
1. The Nature and Tasks of Market Theory
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This book is devoted to the study of the theory of the market system. In this first chapter we attempt to obtain a clear notion of what is meant by a market; what is meant by a market system; and how economic theory can throw light on the nature of market processes. Our discussion...
2. The Market: Its Structure and Operation
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In this chapter and in the next, we survey the market, its overall operations and achievements. Later we will analyze, separately, the different functional sectors that compose the market, and how these various sectors interact within the market. Here, we will contemplate the forest...
3. Efficiency, Coordination,and the Market Economy
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In this chapter we complete our broad preliminary survey of the theory of the market system, its operation and achievements. Chapter 2 attempted to provide a bird’s-eye view of the way the market transmits economic forces through the system, tending to make the actions of all...
4. Utility Theory
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In this and the succeeding chapters we discuss the theory of the demand side of the market. Our task will be to explain the way the alternatives presented to each consumer by the market determine the way he spends his income and the quantities of each good that he decides to...
5. Consumer Income Allocation
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We have developed thus far the tool of marginal utility. We must now put this tool to use in analyzing the pattern of consumer behavior in spending his income in the marketplace on the goods and services he desires. Such an analysis (a) will enable us to understand the forces of...
6. Market Demand
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In this chapter we will carry forward the analysis of consumer demand from the individual to the market. Each individual, we found, attempts to allocate his consumption expenditures among various available goods according to fairly well-defined principles. There will therefore...
7. Market Process in a Pure Exchange Economy
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Until now we have been concerned with the way consumers make decisions when faced with the necessity of choosing between alternatives given by the market. We assumed consumers were faced with an array of products that could be bought at given prices. We investigated the...
8. Production Theory
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Thus far, our analysis of individual economic activity and of the interaction in the market of the economic activity of numerous individuals has been confined to a world where no production was considered possible. The market process we were able to analyze was a process where all...
9. Costs and Supply
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An understanding of the operation of the full market process must include, we have seen, the understanding of the forces acting to supply the market with the various produced goods and services. These forces determine the arrays of alternatives offered to prospective consumers. But we...
10. Partial Market Processes—The Determination of Product Prices and Factor Prices
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We return now to consider the market process. In Chapter 7 we considered the kind of market process that would emerge in the absence of production. We assumed a society naturally endowed with a daily income of consumption goods of various kinds, and we then followed...
11. The General Market Process
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In the present chapter we seek to understand how the competitive market process works in a system where no prices are considered as “given” or constant. In such a system the prices of all factors, and of all products, are variables that take on values determined by the market...
12. Monopoly and Competition in the General Market
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We have been examining until now market processes where the relevant market forces operated principally through competitive pressures. We saw how the price that each resource owner obtains for the resources he sells (or the price that each producer obtains for the...
13. The Price System and the Allocation of Resources
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Most of this book has been concerned, “positively,” with the operation and mechanics of a free enterprise system and the market process. We have discussed the process by which the market determines (a) the prices and quantities produced of each possible product, (b) the prices...
Appendix: The Application of Market Theory to Multi-Period Planning
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This book has outlined the process by which decisions of individual market participants interact and are brought into mutual coordination. Through the price system, the owners of resources are attracted to sell their respective resources to entrepreneurs whose production plans...
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Page Count: 372
Publication Year: 2012
Series Title: The Collected Works of Israel M. Kirzner