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- Title
ANALYSIS OF COST OF PRODUCTION.
- Authors
Macvane, S. M.
- Abstract
The article presents an analysis of cost of production. The definition that makes abstinence an element in cost of production seems to be open to very serious objections. In the first place, as a matter of scientific accuracy, it is clear that production must have preceded abstinence. There can be no abstinence until there is wealth to abstain from. The first wealth abstained from must have had a cost of production as well as all later wealth, and in that cost abstinence can have had no place. Now, the quantity of wealth abstained from is gauged by its value; and its value depends on its cost of production. If, then, one introduces abstinence as an element in determining value, and value as a factor in the measure of abstinence, one is clearly guilty of using the thing to be measured as part and parcel of the standard for measuring it. Again, the primary object of the definition was to eliminate questions of wages and profits from cost of production. But, clearly, the quantity of wealth abstained from in the production of any commodity depends directly on the rate of wages.
- Subjects
INDUSTRIAL costs; BREAK-even analysis; WEALTH; VALUE (Economics); WAGES; PROFIT
- Publication
Quarterly Journal of Economics, 1887, Vol 1, Issue 4, p481
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1879343