Tuesday, April 2, 2019

Commodity space and product space

Markets filterbpossible products by production costs plus development costs But market prices as the sole revenue for producing a product May be socially sub optimal One has to analyze what does not get produced in a simple market system for Non price reflected benefits Just like non price reflected costs But in addition what potential products are never produced as commodities Because fixed start up or development costs Exceed potential profits from sale of products at market prices