Economies of scale and self-financing rules with non-competitive factor markets

• 成果类型: Article
• 署名作者: Small, KA
• 署名单位: University of California System; University of California Irvine
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(99)00032-8
• 发表日期: 1999
• 页码: 431-450
• 关键词: scale economies; monopsony; self-financing; highway investment

摘要

When a firm or public enterprise prices output at marginal cost, its profits are related to the degree of local scale economies in its cost function. I show that contrary to common belief, this result holds even when scale economies are affected by a rising factor supply curve. Thus marginal-cost pricing may be profitable even with constant returns to scale. Examples are provided for a monopsonist both with and without price discrimination, and for a case such as highways where congestion-prone inputs are supplied by users. Court rulings governing land purchase for highways illustrate: the applicability of the results. (C) 1999 Elsevier Science S.A. All rights reserved.