Theory of Production
This textbook offers a rigorous yet accessible exploration of production theory and partial equilibrium, extending well beyond the scope of standard microeconomic texts. Designed for students at both undergraduate and graduate levels, it integrates classical insights with modern analytical tools to deepen their understanding of production and price theory.
In addition to covering foundational topics, this book introduces lesser-known but highly significant concepts often omitted in mainstream curricula. Readers will encounter Böhm-Bawerk’s marginal pairs, the idea of perfect competition as full appropriation, and the elusive notion of roundaboutness. Further chapters explore the inverse problem of costs, the medium-run supply curve, and the decentralization of the transportation problem, culminating in a discussion of Menger’s Law—a powerful principle at the heart of Austrian economics. A unique feature of the book is its sustained focus on shadow prices, offering students thorough training in interpreting and applying this crucial concept across a range of economic settings.
Rodrigo Peñaloza earned his PhD from the University of California, Los Angeles, his MSc from the Institute of Pure and Applied Mathematics in Rio de Janeiro, and his bachelor's degree from the University of Brasilia. He teaches Price Theory, Microeconomics of Banking, Theory of Incentives, and Mathematical Methods.
Luciano de Castro is a Professor of Economics at the Tippie College of Business, University of Iowa. He holds a degree in Electronic Engineering from ITA and completed his PhD and MSc at IMPA. His research focuses on Economic Theory, with significant contributions to Auction Theory, Game Theory, Political Economy, and Decision Theory. Recently, he has been working extensively on quantile preferences.