The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Ideal Output

  • J. V. de Graaff
Reference work entry


Pigou’s notion of ‘the ideal output’ as ‘the output in any industry which maximizes the national dividend, and, apart from the differences in the marginal utility of money to different people, also maximises satisfaction’ has long been eclipsed by the ‘general optimum of production and exchange’, in which the welfare of each member of the community is maximized in turn, subject to certain constraints – even though the more modern theory, despite its advantages, does not necessarily reach any substantially different conclusions. But ideal output theory is by now no more than an episode in the history of economic thought.


Barone, E. Competitive equilibrium External economies General optimum of production and exchange Ideal output Imperfect competition Marginal equivalence Marginal social product Monopoly Pareto, V. Pigou, A. C 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. V. de Graaff
    • 1
  1. 1.