The Assembly of Rents
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Kwok C. Wong
Abstract
There are fixed costs in production. One has to assemble rents earned in production lines to cover them. There are also fixed costs in consumption. Consumers assemble surpluses to cover them. In either case, rent assemblage could either be a quantity solution, a quality solution, or a combination of both. Once a fixed cost is committed by contract, it becomes historical. Yet compared to the option of paying this fixed cost all over again, increasing those quantities or qualities, which do not further increase this fixed cost, is less costly. The Law of Demand therefore implies the quality and/or the quantity solutions. The quality solution, as provided by the Alchian-Allen Theorem, is but a special case: where an increase in quality is the only viable solution under some specific real world constraints.
Note
The Chinese version of this paper was presented at the Conference on Economic Explanation, Hang Zhou, China; on November 1st, 2014. While ideas are mostly Professor Cheung’s, the author is responsible for any mistake and misinterpretation.
©2016 by De Gruyter
Artikel in diesem Heft
- Frontmatter
- Original Articles
- Steven N.S. Cheung’s Reminiscence of Himself – A Reply to Ning Wang
- China’s Challenge: Expanding the Market, Limiting the State
- Steve Cheung in Seattle, 1969–1982
- Steve Cheung as Teacher
- Steven Cheung at Chicago, 1968
- Seeing Things with Your Own Eyes: Steven Cheung’s Example for Economists
- Steven Cheung and Coasian Economics: A Personal Reflection
- Cheung, Becker and Marriage
- Economic Explanation: From Sharecropping to the Sharing Economy
- The Assembly of Rents
- Contract Matters: An Explanation of China’s Recent Economic History
- The Contractual Nature of the City
- Wisdom of the Past
- Benjamin Constant on Law and Government
- Market for ideas
- On Human and Natural Economies Interview Geerat J. Vermeij, by Grégoire Canlorbe
Artikel in diesem Heft
- Frontmatter
- Original Articles
- Steven N.S. Cheung’s Reminiscence of Himself – A Reply to Ning Wang
- China’s Challenge: Expanding the Market, Limiting the State
- Steve Cheung in Seattle, 1969–1982
- Steve Cheung as Teacher
- Steven Cheung at Chicago, 1968
- Seeing Things with Your Own Eyes: Steven Cheung’s Example for Economists
- Steven Cheung and Coasian Economics: A Personal Reflection
- Cheung, Becker and Marriage
- Economic Explanation: From Sharecropping to the Sharing Economy
- The Assembly of Rents
- Contract Matters: An Explanation of China’s Recent Economic History
- The Contractual Nature of the City
- Wisdom of the Past
- Benjamin Constant on Law and Government
- Market for ideas
- On Human and Natural Economies Interview Geerat J. Vermeij, by Grégoire Canlorbe
