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Optimum výrobce při stále rostoucích výnosech z rozsahu
[Producer's optimum under unremitting increase of returns to scale]

Author

Listed:
  • Jiří Hlaváček
  • Michal Hlaváček

Abstract

This paper is an attempt to grasp and model the problem of optimal strategy of a firm under conditions of unremitting increase of returns to scale and multiple threats of firm's downfall. The firm in our model has to pay high fixed costs to enter the market and its marginal costs are insignificant (zero). The firm is threatened by two threats at one time: by too low profit and by an entrance of a new firm to the market. We have shown that this problem has (either for uniform or for normal distribution of probability of survival) only one solution. This enables us to construct the supply function. In case of absence of the new entry threat, this supply function is in fact the supply function in the standard neoclassical microeconomics.

Suggested Citation

  • Jiří Hlaváček & Michal Hlaváček, 2002. "Optimum výrobce při stále rostoucích výnosech z rozsahu [Producer's optimum under unremitting increase of returns to scale]," Politická ekonomie, Prague University of Economics and Business, vol. 2002(5).
    • Handle: RePEc:prg:jnlpol:v:2002:y:2002:i:5:id:382
    DOI: 10.18267/j.polek.382
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