A note on input congestion
The notion of effective space is introduced, and input congestion is explained by economic activities’ exhaustion of effective space. In this setting, I show that profit maximization is inconsistent with input congestion at the firm level, but not necessarily with input congestion at the industry level, when effective space is shared among producers.
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- Murty, Sushama & Russell, R. Robert, 2010.
"On modeling pollution-generating technologies,"
The Warwick Economics Research Paper Series (TWERPS)
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