The Short-Run Aggregate Profit Function and the Capacity Distribution.
The mapping between the capacity distribution of production activities and the short-run aggregate profit function is analyzed, with emphasis on the recovery of the former from the latter and the characterization of the profit function. For the case of two inputs, it is shown that the mapping is one-to-one. It is also shown that the short-run aggregate profit and, hence, the output supply and input demand functions can be approximated by polynomials in the reciprocals of normalized input prices. Properties of these functions are also presented. Copyright 1994 by The editors of the Scandinavian Journal of Economics.
Year of publication: |
1994
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Authors: | Lau, Lawrence J ; Ma, Barry K |
Published in: |
Scandinavian Journal of Economics. - Wiley Blackwell, ISSN 1467-9442. - Vol. 96.1994, 2, p. 201-18
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Publisher: |
Wiley Blackwell |
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