Classical economists assume that production costs are the most significant factor in the cost of an item. Neoclassical economists believe that the buyer's view on the expense of a product is the driver of its cost. They consider the economic surplus to be the difference between the real cost of production and the retail price. Although business has little importance in neoclassical theory, it is central to the post-Keynesian study of prices. In this essay I will clarify the neoclassical theory of value and the post-Keynesian market theory. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Neoclassical pricing theory dates back to classical economic fathers such as Adam Smith and represents the belief in self-interest and individual autonomy. Smith proposed that self-interest motivates relationships between people particularly in economic matters, and individuals seeking their own self-interest, primarily by generating wealth, when targeted by market mechanisms. Neoclassical pricing theory also assumes that, given that people have the full social value of each option, there is no externalization of any market exchange, given full awareness of alternative options. Under these assumptions, the prices of various goods represent the comparative cost of production for society. When prices work properly, buyers will “cast an informed vote” in purchasing goods, thus ensuring the best mix of consumption choices for societies. Suppliers must respond to customer ratings and provide the most popular products, thus increasing their utility. Rationality and its descendant, profit maximization, is another fundamental principle of neoclassical price theory. Neoclassical price theory assumes that when a choice is made in the market, people will actually be able to decide both on desired ends and on the best way to achieve them. People have therefore clearly specified a choice and will choose the appropriate option or method to optimize the utility or satisfaction of those pursuing ends motivated by self-interest. Therefore, a key attribute of the economy and the price mechanism is that its activity shows both the needs and preferences of buyers and the shortage of inputs. Consumers face demand-side budget constraints, and neoclassical pricing theory assumes that when purchasing goods, consumers carefully calculate their financial constraints. Rationality implies increased revenue on the supply side. In combining labor and raw material capital and in deciding how many goods to produce and at what price, producers rely primarily on profit maximization. In any situation model, the principle of rationality turns people, whether consumers or providers, into abstractions of how any intelligent person should act in this situation, ignoring psychological predilections, beliefs, values, tastes, and effect of social institutions. In perfect competition, the price of the product is not just the profit that consumers obtain from the good or quality, determined by their willingness to pay, what consumers attribute to the good. The price also represents the production costs of the good for suppliers, the company costs. The net effect is that producers produce goods at the lowest social cost and can purchase them from any customer who values ​​the product at this quality and value (Strader 2015). On the other hand, although organization has little importance in the theory of)).