Buchumschlag

Notes

Gespeichert in:
Veröffentlicht in:Management Science (pre-1986) vol. 27, no. 2 (Feb 1981), p. 231-237
1. Verfasser: Soyster, A L
Veröffentlicht:
Institute for Operations Research and the Management Sciences
Schlagworte:
Shadow prices
Economic rent
Production functions
Profits
Linear programming
Marginal pricing
Monopolies
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Abstract:For an ordinary linear program it is well known that, if the resources are evaluated at marginal prices determined by an optimal dual solution, then this imputed value is identical with the value of the primal objective function. For a convex program with a nonlinear objective function and linear constraints this identity in general does not hold. The resulting difference is due to a returns to scale associated with the objective function, as earlier pointed out by Balinski and Baumol [1]. In this paper we consider a certain perturbation of the objective function that characterizes the difference between the objective function value and imputed marginal cost. This perturbation, when applied to a certain class of profit maximizing monopolies, explains the difference between the monopoly price and the marginal production cost.
ISSN:0025-1909
1526-5501
Quelle:ABI/INFORM Global