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Keyword: nondifferentiable joint costs;
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Anthony Horsley and Andrew J Wrobel
This is a new formal framework for the theory of competitive equilibrium and its applications. Our “short-run approach” means the calculation of long-run producer optima and general equilibria from the short-run solution...Read more...
The Wong-Viner Envelope Theorem on the equality of long-run and short-run marginal costs (LRMC and SRMC) is reformulated for convex but generally nondifferentiable cost functions. The marginal cost can be formalized as t...Read more...
The “short-run approach” calculates long-run producer optima and general equilibria by building on short-run solutions to the producer’s profit maximization problem and on profit-based valuation of the fixed inputs. We o...Read more...