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Fixed cost efficiency with infinitesimal competitors

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  • Linus Wilson

Abstract

Suppose that infinitesimal firms have identical variable costs, but there is heterogeneity in their fixed costs. Regardless of the ordering of entry and exit, fixed costs will be minimized for a given industry size.

Suggested Citation

  • Linus Wilson, 2010. "Fixed cost efficiency with infinitesimal competitors," Applied Economics Letters, Taylor & Francis Journals, vol. 17(7), pages 667-671.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:7:p:667-671
    DOI: 10.1080/13504850802297921
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