CFDP 724

On a General Existence Theorem for Marginal Cost Pricing Equilibria

Author(s): 

Publication Date: December 1984

Pages: 21

Abstract: 

We report a generalization of recent results on the existence of marginal cost pricing equilibria (MCPE) in economies with an increasing returns to scale industry. Our result makes no ad hoc assumptions which force the equilibrium to be on the efficiency frontier of the aggregate production possibility set. We also present an additional condition under which our MCPE are productivity efficient in the aggregate.

See CFP: 653