Duality of welfare and profit maximization

Nicolas Boccard ()

Economics Letters, 2011, vol. 113, issue 3, 215-217

Abstract: Many economists are aware that the conditions for the efficiency and monopolization in a partial equilibrium framework are the extremes of the Ramsey–Boiteux formula when the Lagrange multiplier for the budget varies. We formalize the duality existing between the welfarist and monopolist constrained maximization programs by proving the following “folk theorem”: maxWelfares.t.profit≥fixed cost⇔maxProfits.t.output≥minimum.

Keywords: Duality; Welfare; Regulation; Ramsey–Boiteux (search for similar items in EconPapers)
JEL-codes: D42 D61 L51 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:113:y:2011:i:3:p:215-217

DOI: 10.1016/j.econlet.2011.07.010

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