The administered prices, normal cost prices, and mark up prices doctrines contain numerous theoretical insights and arguments useful for the development of a Post Keynesian theory of prices, especially its pricing foundations. The purpose of this and the following chapter is to draw upon the three doctrines to develop an empirically grounded pricing foundation for Post Keynesian price theory. Chapter 11 will examine and empirically ground the analytical costing, pricing, and price components of the pricing foundation. That is, over 100 empirical studies on costing, pricing, and prices will be used to establish the appropriate analytical delineation of the costing and pricing procedures and price policies of the business enterprise and price-setting market institutions and to delineate the properties of the prices based on the pricing procedures. Then, drawing on the formal and mathematical methods associated with the mark up prices doctrine, the enterprise and market pricing equation which can be derived from the pricing procedures will be formalized and mathematized. Chapter 12 continues the development of the pricing foundation and discusses its implication for Post Keynesian price theory.

Costing and pricing procedures

Each price doctrine postulated that prices were set in connection with costs in that the pricing procedures used by the business enterprise are based on the cost accounting system it uses to collect product costs.