PREFACE

Elementary Price Theory was written for beginning students who so often find price theory the most difficult and the least useful part of economics. It is the purpose of this book to make the subject understandable and to show that it is relevant.

Most of the book is devoted to purely theoretical topics, which are developed as simply and as orderly as possible without sacri�ficing accuracy. No attempt has been made to prove every proposi�tion mentioned nor to mention every proposition that exists in the field. The book emphasizes the main outline of conventional partial equilibrium analysis. The theories of consumer demand, production and cost, and market structures are used to explain price determina�tion in the product market; and the theories of factor supply and marginal productivity are used to explain income distribution in the factor market.

For the beginning student, theory alone is not enough: it is not evident to even good students that the theory is relevant. For this reason the last part of many chapters discusses the significance of the theory. These sections may be omitted without detracting from the development of the theory in subsequent chapters. Since begin�ning courses typically introduce the student to a wide range of microeconomic subjects-such as labor problems and farm problems in addition to covering economic theory, a course in which this book is used may well be improved if it is supplemented with additional reading material on special topics. Elementary Price Theory may