Money and the Real World by Paul Davidson (auth.)

By Paul Davidson (auth.)

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I. Since this is the only price-output combination at which he can expect to cover average total costs,Z he sets I Kaldor, 'Economic Growth', Economica (1959) p. 217. • If the expected demand curve mtersects the A TC curve at more than one production flow-Ievel, the entrepreneur will choose between these alternatives on the basis of some criteria such as maximising the production and sales, given the normal profit target. MONEY AND THE REAL WORLD Q. as his standard volume. Hence, until the entrepreneur makes his pricing and standard volume decision based on his estimate of market demand, the A TC curve can be conceived of as depicting alternative price and production combinations which, given prime costs, will yield a normal profit on the net finance committed.

Are D.......... ~ O. Output Fig. 1 The neo-keynesian entrepreneur can be viewed as attempting to estimate at what level of output buyers would be normally willing to pay a price per unit just equal to A TG. e. he expects to be facing the dotted demand curve DD in Fig. 3. I. Since this is the only price-output combination at which he can expect to cover average total costs,Z he sets I Kaldor, 'Economic Growth', Economica (1959) p. 217. • If the expected demand curve mtersects the A TC curve at more than one production flow-Ievel, the entrepreneur will choose between these alternatives on the basis of some criteria such as maximising the production and sales, given the normal profit target.

For I G. L. Shackle, The Tears of High Theory (Cambridge: Cambridge University Press, 1967) p. 290. Interestingly enough, the English Neokeynesian school is currently utilising the Economics of Tranquillity in their Analysis of Golden Ages, while simultaneously attacking modern neoclassicists for utilising the 'capital malleability assumption', which in essence, is equivalent to assuming changes never exceed the physical decay of equipment, so that there is never redundant capacity. For example, see L.

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