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In some interpretations of the Marxian transformation problem, total "(production) prices" for output must equal total "values" by definition, and total profits must by definition equal total surplus value. However, Marx himself explicitly denied in chapter 49 of the third volume of Das Kapital that such an exact mathematical identity actually ...
The difference in the value of the production values (the output value) and costs (associated with the factors of production) is the calculated profit. Efficiency, technological, pricing, behavioural, consumption and productivity changes are a few of the critical elements that significantly influence production economically.
In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can comprise any of the factors of production (including labor, capital, or land) and taxation .
Figure 6: Production possibilities set in the Robinson Crusoe economy with two commodities. The boundary of the production possibilities set is known as the production-possibility frontier (PPF). [9] This curve measures the feasible outputs that Crusoe can produce, with a fixed technological constraint and given amount of resources.
In production, he argues, the workers produce a value equal to their wages plus an additional value, the surplus-value. They also transfer part of the value of fixed assets and materials to the new product, equal to economic depreciation (consumption of fixed capital) and intermediate goods used up ( constant capital inputs).
In an oligopoly, firms are able to collude and limit production, thereby restricting supply and maintaining a constant economic profit. [ 7 ] [ 10 ] [ 2 ] An extreme case of an uncompetitive market is a monopoly, where only one firm has the ability to supply a good which has no close substitutes . [ 14 ]
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In economic theory, a factor price is the unit cost of using a factor of production, such as labor or physical capital. There has been much debate as to what determines factor prices. Classical and Marxist economists argue that factor prices decided the value of a product and therefore the value is intrinsic within the product.