Conditional Factor Demands and Positive ...
Document type :
Compte-rendu et recension critique d'ouvrage
Title :
Conditional Factor Demands and Positive Output Effects: A Necessary and Sufficient Condition
Author(s) :
Journal title :
Economics Bulletin
Pages :
1549-1554
Publisher :
Economics Bulletin
Publication date :
2017-07-08
ISSN :
1545-2921
HAL domain(s) :
Sciences de l'Homme et Société/Economies et finances
English abstract : [en]
The duality between cost and production functions has been thoroughly studied and is well-known. A given set ofassumptions on the technology implies a set of restrictions on the Jacobian of the cost function and on a subset ...
Show more >The duality between cost and production functions has been thoroughly studied and is well-known. A given set ofassumptions on the technology implies a set of restrictions on the Jacobian of the cost function and on a subset of itsHessian matrix. The vector of second derivatives of the cost function with respect to the input prices and the outputhas not been fully characterized, however. In this note, we present a necessary and sufficient condition to ensure thatthe components of this vector are all strictly positive. That is, we specify the condition for all conditional demandfunctions to be simultaneously increasing in output. This condition is interpreted as a strengthening of the quasiconcavity of the production function.Show less >
Show more >The duality between cost and production functions has been thoroughly studied and is well-known. A given set ofassumptions on the technology implies a set of restrictions on the Jacobian of the cost function and on a subset of itsHessian matrix. The vector of second derivatives of the cost function with respect to the input prices and the outputhas not been fully characterized, however. In this note, we present a necessary and sufficient condition to ensure thatthe components of this vector are all strictly positive. That is, we specify the condition for all conditional demandfunctions to be simultaneously increasing in output. This condition is interpreted as a strengthening of the quasiconcavity of the production function.Show less >
Language :
Anglais
Popular science :
Non
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