As well as providing a thorough treatment of the key elements of price theory for second-year students of microeconomics, this textbook also presents a distinctive perspective on the material, embedding these elements in a sustained analytical argument linking price theory to the study of industry. This perspective is valuable for economics and business students in both second and third years of study.
Starting from a Paretian stand-point, the argument develops the logic of individual choice and its implications for interdependent consumers and producers, and reviews the efficiency conditions appropriate to a general equilibrium framework. This is then used to derive the corresponding Marshallian functions, allowing the conditions for a competitive equilibrium to be established. The argument proceeds to consider different market structures, establishing the relevance for the study of oligopoly of game theoretic approaches: a chapter is devoted entirely to game theory, including repeated games and theories of rational choice.
The book has several distinctive features: a stress on the interdependence between output and employment decisions; an explicit focus on E.H. Chamberlin's analysis of monopolistic competition; an unobtrusive historical dimension; parallel diagrammatic and mathematical treatments of optimisation; linkages with classical macroeconomics; and an emphasis on the implications of time and uncertainty.