The Economics of the Just Price Essay Example | Topics and Well Written Essays - 250 words

The Economics of the Just Price - Essay Example The aspect of determining price fairness has raised questions since the concept was conceived and has been an element of discussion. An economic solution was developed to determine the constituents of fair prices in accordance to some conditions that must be satisfied. These factors are the clear definition of production factors. The presence of perfect competition within the market and the absence of market failures as a result of economies of scale. When these parameters are considered the prices of commodities with only be affected by eh production costs and profits desired; and hence will be fair to both consumer and producer. This determination of the conditions that define fair prices has aided in the understanding of the elements that can be used to determine a fair price. In the ancient times, there were various factors that caused difficulties in determining a fair price and they were summed by the element of capitalism which was characterised by a lack of proper prices for labour, widespread aversion to payment of loans, and failure to incorporate interest payments into production costs.