Austrian School of Economics

Austrian School of Economics is a body of economic theory that determines the value of a product, emphasizing the importance of its utility to the consumer. As it states that goods and services are subjective in nature, Menger explained that the further increase in the number of goods, their value for individuals diminish. Austrian school rejects both the classical and neoclassical views by saying costs of production are also determined by subjective factors based on the value of alternative uses of scarce resources, and the equilibrium of demand and supply is also determined by subjective individual preferences.