Marginal Product is not Demand
5 Pages Posted: 14 Jul 2014
Date Written: July 12, 2014
Abstract
This paper proves that marginal product is not demand. Its use as one leads to inconsistent production. Marginal product is merely a condition for optimization, but itself is not demand. Only the simultaneous solution offers the consistent demand function, consisting solely of exogenous variables. This paper also distinguishes the production manner between communist and free entrepreneurs.
Keywords: Demand, Marginal Product
JEL Classification: D24, O41
Suggested Citation: Suggested Citation
Choi, Hak, Marginal Product is not Demand (July 12, 2014). Available at SSRN: https://ssrn.com/abstract=2465524 or http://dx.doi.org/10.2139/ssrn.2465524
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