Fixed Cost, Variable Cost, Markups and Returns to Scale

Xi Chen () and Bertrand Koebel

Annals of Economics and Statistics, 2017, issue 127, 61-94

Abstract: This paper derives the structure of a production function which is necessary and sufficient for generating a fixed cost. We extend the classical production function in order to allow each input to have a fixed and a variable part. We characterize and estimate both fixed and variable components of the cost function and study how fixed and variable costs interact and affect firms' behavior in terms of price setting and returns to scale.

Keywords: identification; imperfect competition; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: C33 D24 L60 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Fixed Cost, Variable Cost, Markups and Returns to Scale (2017)
Working Paper: Fixed cost, variable cost, markups and returns to scale (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2017:i:127:p:61-94

DOI: 10.15609/annaeconstat2009.127.0061

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