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A note on input congestion

Kenneth Løvold Rødseth

Economics Letters, 2013, vol. 120, issue 3, 599-602

Abstract: The notion of effective space is introduced, and input congestion is explained by economic activities’ exhaustion of effective space. In this setting, I show that profit maximization is inconsistent with input congestion at the firm level, but not necessarily with input congestion at the industry level, when effective space is shared among producers.

Keywords: Congestion; Firm and industry technologies; Externalities (search for similar items in EconPapers)
JEL-codes: D24 D62 Q32 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:599-602

DOI: 10.1016/j.econlet.2013.06.021

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