Template-Type: ReDIF-Article 1.0
Author-Name: Sergey K. Aityan
Title:  Price-Value Potential for Near-Perfectly Competitive Markets
Abstract:  This study introduces price-value potential to be used instead of price for market analysis by analogy with free energy or thermodynamic potential in physics. A conservation principle is proposed for price-value potential. It is shown that price-value potential provides a constructive way for market analysis by identifying variation of equilibrium prices and quantities for different products in market equilibrium. A perturbation theory for a group of products with small differentiations on near-perfectly competitive markets was developed for illustration of the approach. The concept of price-value potential is illustrated in a simple example of a near-perfectly competitive market. It is shown that the equilibrium prices and quantities for products differ due to product differentiation that makes such an approach a constructive enhancement to the classical model of perfect competition.
Keywords: Market equilibrium, differentiation, perfect competition, value, price-value, market modeling, market free energy
Journal: American Journal of Economics and Business Administration
Pages: 623-635
Volume: 3
Issue: 4
Year: 2012
Month: February
DOI: 10.3844/ajebasp.2011.623.635
File-URL: https://thescipub.com/pdf/ajebasp.2011.623.635.pdf
File-Format: Application/pdf
File-URL: https://thescipub.com/abstract/ajebasp.2011.623.635
File-Format: text/html
Handle: RePEc:abk:jajeba:ajebasp.2011.623.635