Existence and uniqueness of marginal cost pricing equilibrium |
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Authors: | Kevin M. Currier |
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Affiliation: | (1) Oklahoma State University, USA |
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Abstract: | This paper considers a regulated monopoly that is subject to a marginal cost pricing policy. A marginal cost pricing equilibrium is a price-subsidy combination for which price equals marginal production cost and any losses are offset by the lump-sum subsidy. Employing basic degree theoretic results, conditions are established under which a marginal cost pricing equilibrium exists and is unique. |
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