Cost Minimization under Variable Input Prices: A Theoretical Approach
It is generally admitted that fixed, low input prices for resources cause distortions in the input mix, in the sense of inefficient usage of resources.We consider a particular homogeneous functional form for representing the potential distortions in the input factor quantities in the context of deriving Cobb-Douglas cost functions and such a representation can offer a justification for why the average cost may behave eratically, altghough the technology remains unchanged. Fixed input prices become a special case. Our generalized form of Shepard3’s lemma allows us to interpret the corresponding input prices’s homogeneity orders as measures of the efficiency wages.
Volume (Year): (2013)
Issue (Month): 2 (June)
|Contact details of provider:|| Postal: |
Phone: 004 021 3188148
Fax: 004 021 3188148
Web page: http://www.ipe.ro/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan S. Blinder, 1981.
"Inventories and Sticky Prices: More on the Microfoundations of Macroeconomics,"
NBER Working Papers
0620, National Bureau of Economic Research, Inc.
- Blinder, Alan S, 1982. "Inventories and Sticky Prices: More on the Microfoundations of Macroeconomics," American Economic Review, American Economic Association, vol. 72(3), pages 334-48, June.
- Gordon, Robert J, 1981.
"Output Fluctuations and Gradual Price Adjustment,"
Journal of Economic Literature,
American Economic Association, vol. 19(2), pages 493-530, June.
- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, March.
- Robert E. Hall, 1980. "Employment Fluctuations and Wage Rigidity," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(1, Tenth ), pages 91-142.
- Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.
- Emilian Dobrescu, 2009. "Estimating the Total Factor Productivity in Romanian Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(26), pages 512-521, June.
When requesting a correction, please mention this item's handle: RePEc:rjr:romjef:v::y:2013:i:2:p:70-86. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Corina Saman)
If references are entirely missing, you can add them using this form.