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The short-run approach to LRMC pricing for multiple outputs with nondifferentiable costs

By Anthony Horsley and Andrew J. Wrobel


Using convex calculus, we extend the Wong-Viner Theorem to nondifferentiable costs by equating the capital inputs' rental prices to their profit-imputed marginal values. Thus extended, the short-run approach to LRMC pricing is applied to peak-load pricing with storage

Topics: HB Economic Theory
Publisher: Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science
Year: 2000
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Provided by: LSE Research Online

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