Marginalist School

It is a school of economic thought that emerged in the mid-nineteenth century. It focuses on the "margin",
that is, the last unit produced or lost of a good. Its main contribution was the law of diminishing marginal
utility. The marginalists introduced a formalized language, which led to the assimilation of mathematics in
economics.

Of the various contributions of Edgeworth to the content of economic thought, three in particular stand out.
In the first place, it originated the idea of a curve of indifference that represent consumer preferences.
The indifference curves together with the budget that the consumer has to spend are the fundamental
elements to determine the equilibrium point of a consumer and hence deduce their demand curve.

Second, he was one of the first economists to formalize the proposal in favor of the free market in which
the price of goods is agreed upon by consent between sellers and buyers, through the laws of supply and
demand.
Finally, he clarified the difference between average product and marginal product, which helped the
development of the modern short-term production function and its numerous applications.

Around 1880 it seemed that Clark had developed, independently, the concept of marginal utility and its
influence on exchange value. Marginal productivity is the variation that the Total Product experiences when
using an additional unit of factor. For example, the variation in the production of a certain good when six
people are employed instead of five.
Something much more significant: not only did he invent the term marginal productivity, but he also
presented the clearest and best analysis until his time of the theory of the distribution of marginal
productivity. His theory was based on the law of diminishing returns, which says, as the quantity of a