THE CONTRIBUTIONS OF THE VON THÜNEN SYSTEM TO THE THEORY OF DIMINISHING MARGINAL DISTRIBUTION

Abstract

The main objective of this article is to highlight the contributions of Johann Heinrich Von Thünen (1783-1850) to economic theory. It begins with a literary review on the fundamental principles of its "state of isolation". Sketched from an intuitive abstraction, it represents a consumer center surrounded by belts of different cultures in which the distance between these productive spaces and the market is considered the only determining variable in the formulation of the final prices of the products offered. In short, the reduction of two transport costs, for certain goods, will establish a difference in the price formation curve for the others and, consequently, will determine their balance. The article is composed of three sections and two subsections, excluding the introduction and final considerations. It first presents the historical context of Germany in the 19th century, in which it was produced by the work of Von Thünen, at the same time in which it comments on the origin and the intellectual projection of this theory. The second section constitutes an explanation of the composition and distribution of income in an isolated state based on diagrams and equations. Finally, the third section highlights the contributions and criticisms applied to the model evaluated as a precursor of the "decreasing marginal distribution theory".