IMPLICATIONS OF PRODUCTION COSTS: MICROECONOMIC ASPECT

Abstract

Abstract

Perceptions of production costs, micro- and macroeconomic consequences of their change are considered. It has been shown that in neoclassical theory, the consequence of the transformation of the monopoly market into a market of perfect competition is: 1) a decrease in the commodity price and 2) an increase in marginal production costs. An important consequence of the increase in production costs (in microeconomic terms) is the positive trend in the use of resources (inputs). In the article, from the comparison of monopoly models and perfect competition, it follows that the degree of coercion of a firm to reduce the price of sales depends on the degree of intensity of market competition, and, on the contrary, the degree of coercion of a firm to save on resources (to reduce the level of production costs) does not depend on the degree of intensity of market competition.