6533b82bfe1ef96bd128e378

RESEARCH PRODUCT

Strictly convex variable cost does not imply U-shaped average cost

Antonio TesoriereLuigi Balletta

subject

Marginal costEconomics and EconometricsAverage fixed costTotal cost05 social sciencesEndogenous entrySettore SECS-P/06 - Economia ApplicataVariable costMicroeconomicsU-shaped average costConvex cost0502 economics and businessEconometricsEconomicsFixed costMarket power050207 economicsFixed costSettore SECS-P/01 - Economia PoliticaAverage cost050205 econometrics Minimum efficient scale

description

Abstract We show that strictly convex variable costs do not imply U-shaped average costs and provide a sufficient condition for U-shaped average costs. As an application we study endogenous entry when firms have market power and they have decreasing average cost but increasing marginal cost.

yearjournalcountryeditionlanguage
2016-12-01
10.1016/j.rie.2016.05.002http://hdl.handle.net/11588/707485