The LeChatelier Principle
AbstractThe LeChatelier principle, in the form introduced into economics by Paul A. Samuelson, asserts that, at a point of long-run equilibrium, the derivative of long-run compensated demand with respect to own price is larger in magnitude than the derivative of short-run compensated demand. The authors introduce an extended LeChatelier principle that applies also to large price changes and to uncompensated demand as well as to a wide range of concave and nonconcave maximization problems outside the scope of demand theory. This extension also clarifies the intuitive basis of the principle. Copyright 1996 by American Economic Association.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 86 (1996)
Issue (Month): 1 (March)
Other versions of this item:
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- D10 - Microeconomics - - Household Behavior - - - General
- D20 - Microeconomics - - Production and Organizations - - - General
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