Differentiable Technology, the Curvature of the Profit Function, and the Response of Supply to Own-Price Changes

Autor/in	Somerville, R. A.
Titel	Differentiable Technology, the Curvature of the Profit Function, and the Response of Supply to Own-Price Changes
Quelle	In: Journal of Economic Education, 38 (2007) 2, S.222-228 (7 Seiten)Infoseite zur Zeitschrift PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0022-0485
Schlagwörter	Microeconomics; Consumer Economics; Theories; Economics Education; Income; Costs; Supply and Demand; Mathematics; Undergraduate Study + Suchen Sie Ihr Suchwort? Mikroökonomie; Konsumökonomie; Theory; Theorie; Wirtschaftskunde; Einkommen; Cost; Kosten; Bedarfsplanung; Mathematik; Grundstudium
Abstract	The author establishes a property of supply for a competitive firm: Assuming differentiability of the production frontier, linearly independent price vectors have disjoint image sets under the supply mapping. This property supports the main results. First, the author drew a simple proof of McFadden's proposition that differentiability of the production frontier is necessary and sufficient for strict quasi-convexity of the profit function. This proposition rules out linearity of the profit function on any subset of price domain, in turn ruling out supply and input-demand functions that are constant and have zero values for all price effects. Second, for discrete price changes, own-price effects in supply are strictly positive, assuming a differentiable technology. In this context, strict convexity of the production set is irrelevant. The author indicates implications for cost and demand theory. (Contains 8 notes and 1 figure.) (Author).
Anmerkungen	Heldref Publications. 1319 Eighteenth Street NW, Washington, DC 20036-1802. Tel: 800-365-9753; Tel: 202-296-6267; Fax: 202-293-6130; e-mail: subscribe@heldref.org; Web site: http://www.heldref.org
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10