EconPapers    
Economics at your fingertips  
 

On inferior inputs and marginal returns

Paolo Bertoletti () and Giorgio Rampa

Journal of Economics, 2013, vol. 109, issue 3, 303-313

Abstract: An input is inferior if and only if an increase in its price raises all marginal productivities. A sufficient condition for input inferiority under quasi-concavity of the production function is then that there are increasing marginal returns with respect to the other input and a non-positive marginal productivity cross derivative. Thus, contrary to widespread opinion, input “competitiveness” is not needed. We discuss these facts and illustrate them by introducing a class of simple production function functional forms. Our results suggest that the existence of inferior inputs is naturally associated with increasing returns, and possibly strengthen the case for inferiority considerably. Copyright Springer-Verlag 2013

Keywords: Inferior and normal inputs; Marginal productivity; Homotheticity; D11; D21; D24 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s00712-012-0294-4 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:109:y:2013:i:3:p:303-313

DOI: 10.1007/s00712-012-0294-4

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-01-08
Handle: RePEc:kap:jeczfn:v:109:y:2013:i:3:p:303-313