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An alternative way of determining the range of Averch and Johnson's Lagrange multiplier: a note

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Author Info
Jörg Borrmann
Jörg Finsinger

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Abstract

In this note, an alternative method is developed for determining the range of values assumed by the Lagrange multiplier of Averch and Johnson's constrained maximization problem. By assuming that the regulated firm's profit function is single-peaked, the approach is rather general.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 5 (April)
Pages: 269-271
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Handle: RePEc:taf:apeclt:v:13:y:2006:i:5:p:269-271

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