Conclusion: Welfare economics, business economics, and political economics
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Nucleus of our economic theory of public enterprise is the optimal allocation. Thus in the preceding chapters, we have considered welfare optimal prices for efficiently producing public enterprises: Marginal cost prices for public enterprises in a completely competitive surrounding; prices that deviate from marginal costs for public enterprises in a “monopolistic” surrounding. Extensions of the basic model of maximizing consumer surplus plus producer surplus referred to non-allocational objectives or constraints including the revenue-cost constraint. These objectives and constraints, respectively, were always assumed to be given exogenously. And in any case, we assumed the public enterprise to produce efficiently, that means to produce any quantity of goods at the minimal possible costs.
KeywordsPrice Mechanism Public Enterprise Public Supply Consumer Decision Public Production
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