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Keyword: wong-viner theorem;
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Anthony Horsley and Andrew J Wrobel
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...
Using convex calculus, we extend the Wong-Viner Theorem to nondifferentiable costs by equating the capital inputs' rental prices to their profit-imputed marginal values. Thus extended, the short-run approach to LRMC pric...Read more...