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Existence and uniqueness of marginal cost pricing equilibrium

Kevin Currier

Atlantic Economic Journal, 1997, vol. 25, issue 3, 312-317

Abstract: This paper considers a regulated monopoly that is subject to a marginal cost pricing policy. A marginal cost pricing equilibrium is a price-subsidy combination for which price equals marginal production cost and any losses are offset by the lump-sum subsidy. Employing basic degree theoretic results, conditions are established under which a marginal cost pricing equilibrium exists and is unique. Copyright International Atlantic Economic Society 1997

Date: 1997
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DOI: 10.1007/BF02298413

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Handle: RePEc:kap:atlecj:v:25:y:1997:i:3:p:312-317