- Factor price
In economic theory, the price of a finished item affects the factors of production, the various costs and incentives of producing it, so as to 'attract' it toward a theoretical Factor price. In other words it is the concept that the price of an item tends to approach the cost of producing it.
There has been much debate as to what determines factor prices. Classical and Marxist economists argued that the factor prices decided the value of a product and so value was intrinsic within the product. For this reason, the term 'natural price' is often instead used.
Marginalist economists argue that the factor price is a function of the demand for the final product, and so they are imputed from the finished product. The theory of imputation was first expounded by the Austrian economist Friedrich von Wieser.
Wikimedia Foundation. 2010.
Look at other dictionaries:
factor price — ➔ price1 * * * factor price UK US noun [C] ► ECONOMICS, PRODUCTION the price of something that you need to make a product, for example buildings, materials, or labour: »The introduction of new technologies had a huge effect on factor prices … Financial and business terms
Factor price equalization — is an economic theory, which states that the relative prices for two identical factors of production in the same market will eventually equal each other because of competition. The price for each single factor need not become equal, but relative… … Wikipedia
price — A fixed value of something. Prices are usually expressed in monetary terms. In a free market, prices are set as a result of the interaction of supply and demand in a market; when demand for a product increases and supply remains constant, the… … Financial and business terms
Factor analysis — is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved, uncorrelated variables called factors. In other words, it is possible, for example, that variations in … Wikipedia
Price-cap regulation — is a form of regulation designed in the 1980s by UK Treasury economist Stephen Littlechild, which has been applied to all of the privatized British network utilities. It is contrasted with rate of return regulation, in which utilities are… … Wikipedia
Price per watt — Price per watt, or $/W is a common way to compare the capital costs of various forms of electricity generation. It refers to the number of dollars one would have to spend to buy a machine capable of producing one watt of electricity. It is… … Wikipedia
Price index — A price index (plural: “price indices” or “price indexes”) is a normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time. It is a statistic designed to… … Wikipedia
Factor — A financial institution that buys a firm s accounts receivables and collects the debt. The New York Times Financial Glossary * * * ▪ I. factor fac‧tor 1 [ˈfæktə ǁ ər] noun 1. [countable] one of many things that influence or affect a situation: •… … Financial and business terms
factor — (1) The percent of the original face of an MBS pool that remains outstanding at any given time is called the current factor. Principal payments, made by the borrowers, reduce the original face every month. Thus there is a new current factor each… … Financial and business terms
Price elasticity of demand — Not to be confused with Price elasticity of supply. PED is derived from the percentage change in quantity (%ΔQd) and percentage change in price (%ΔP). Price elasticity of demand (PED or Ed) is a measure used in economics to show the… … Wikipedia