Optimal Prices

Optimal Prices 

under socialism, prices obtained in the process of calculating the optimal plan of production and consumption for a given array of economic data, using the methods of mathematical programming. The employment of optimal pricing on a national scale is possible only in a socialist economy, where the action of the basic economic law of socialism makes it possible to represent national economic planning in terms of problems in extremal dynamics.

Optimal prices possess the following characteristics. (1) They ensure the economic-accountability stimulation for carrying out planned tasks in physical (quantitative) terms; all forms of production that are part of the optimal plan and are measured in optimal prices are profitable, and rejected variants are unprofitable. (2) They evaluate the expenditures of separate economic units from the standpoint of their overall economic effectiveness. Optimal prices include not only direct expenditures incurred in producing a given product but the entire sum of additional costs borne by society in other sectors in relation to this output. (3) They reflect the increase or decrease of social costs and result exclusively within small changes in output or consumption of products. This quality of optimal prices permits their use in evaluating microeconomic processes.

N. IA. PETRAKOV