Investment Cost Minimization for Communications Satellite Capacity: Refinement and Application of the Chenery-Manne-Srinivasan Model

Marcellus S. Snow

Bell Journal of Economics, 1975, vol. 6, issue 2, 621-643

Abstract: Chenery, Manne, and Srinivasan contributed to a model of investment in capacity expansion assuming a demand growth rate, a discount rate, and economies of scale. In their model, minimizing the sum of discounted future capacity investment costs always requires capacity replenishments to be equally spaced in time if summation is over an infinite time horizon. But the model assumes a static technology, no depreciation, and no effect of price on demand.

Date: 1975
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