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Fixed Cost, Variable Cost, Markups and Returns to Scale

Author

Listed:
  • Xi Chen

    (STATEC - Institut National de la Statistique et des Etudes Economiques - Institut de Luxembourg, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Bertrand Koebel

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper derives the structure of a production function which is necessary and sufficient for generating a fixed cost. We extend the classical production function in order to allow each input to have a fixed and a variable part. We characterize and estimate both the fixed and variable components of the cost function and study how fixed and variable costs interact and affect firms' behavior in terms of price setting and returns to scale.

Suggested Citation

  • Xi Chen & Bertrand Koebel, 2017. "Fixed Cost, Variable Cost, Markups and Returns to Scale," Post-Print hal-02166757, HAL.
    • Handle: RePEc:hal:journl:hal-02166757
    DOI: 10.15609/annaeconstat2009.127.0061
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    Cited by:

    1. Ryosuke Shimizu & Shohei Momoda, 2020. "Does Automation Technology increase Wage?," KIER Working Papers 1039, Kyoto University, Institute of Economic Research.
    2. Michał Gradzewicz & Jakub Mućk, 2024. "Globalisation and the fall of markups," The World Economy, Wiley Blackwell, vol. 47(3), pages 1089-1116, March.
    3. Ryosuke Shimizu & Shohei Momoda, 2021. "Does Automation Technology increase Wage?," Discussion papers ron343, Policy Research Institute, Ministry of Finance Japan.
    4. A. Panakhov U. & E. Babkova G. & А. Панахов У. & Э. Бабкова Г., 2019. "Интеграция методов управленческого учета в системе функционального учета затрат // The Integration of Management Accounting Techniques in the Functional-based Costing System," Учет. Анализ. Аудит // Accounting. Analysis. Auditing, ФГОБУВО "Финансовый университет при Правительстве Российской Федерации" // Financial University under The Government of Russian Federation, vol. 6(4), pages 42-52.

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    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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