Shipping the Good Apples Out: Another Proof with A Graphical Representation

Tetsuya Saito

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a proof of Alchian and Allen’s thesis—superior good is relatively more consumed in distant market—with some restrictions on the utility function. Comparing to the proof by Borcherding and Silberberg (1978), those assumptions may restrict the model in some sense but we will find the Alchian-Allen theorem is independent of the third law of Hicks (Hicks 1946, pp. 309-311). The theorem is given by natural characteristics of relative demand curves.

Keywords: Fixed transportation cost; quality of goods; relative demand; Alchian-Allen theorem (search for similar items in EconPapers)
JEL-codes: D00 F19 (search for similar items in EconPapers)
Date: 2007-01-01
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1297

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