Price Discrimination in Input–Output

Modern economies are characterized by a great variety of pricing rules. Therefore, the commodities' prices and the primay factors' prices are discriminated in reality. However, in practical input–output tables, as well as in theoy, the prices are uniform and relative. In this work, an input–output model is described with absolute and different prices for final uses commodities and production's primay factors (wages, profits, etc.). In this case, the economic relationships are based on the commodities' demand curves for all the categories of final uses, and the factors' supply curves for all production's branches. In this way, we can establish the linkage and the feedback between factors' prices and quantities, and final uses commodities' prices and quantities. This is obtained by a novel interpretation of input–output, which approximates reality better.