Intrinsic comparative statics of a general class of profit-maximizing rate-of-return regulated firmsMichael R. Caputo and M. Hossein Partovi Oxford Economic Papers, 2008, vol. 60, issue 2, pages 369-382 Abstract: An exhaustive comparative statics analysis of a general rate-of-return regulated, profit-maximizing model of the firm is carried out under a minimal set of assumptions. The resulting intrinsic comparative statics are contained in a positive semi-definite matrix. Each element of this matrix consists of a product of the A-J effect term and a Slutsky-like expression, thereby permitting the familiar interpretation of a compensated price change. The minimal set of assumptions allows a range of anomalous behavior that includes, inter alia, a reversal of the sign of the A-J effect and an increase in the use of an unregulated factor as a result of a compensated own-price increase. The implications of additional assumptions for the mathematical structure of the model and its economic consequences are discussed, and the equivalency relations among those assumptions are delineated. Throughout, mathematical results of the analysis are interpreted with a view to elucidating their intuitive economic significance. Copyright 2008 , Oxford University Press. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:oup:oxecpp:v:60:y:2008:i:2:p:369-382 Ordering information: This journal article can be ordered from Access Statistics for this article Oxford Economic Papers is edited by A. Banerjee and James Forder More articles in Oxford Economic Papers from Oxford University Press |
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