Demand for Capital Service (Consumption Good in the Production of Household Goods)

Yoshihiro Maruyama and Tadashi Sonoda
Additional contact information
Yoshihiro Maruyama: University of Tsukuba
Tadashi Sonoda: Nagoya University

Chapter 6 in A Theory of the Producer-Consumer Household, 2011, pp 173-190 from Palgrave Macmillan

Abstract: Abstract Capital service is demanded by a variety of producing units, for example, capitalist firms which employ this service to maximize the residual profit imputable to themselves, and family firms of the producer-consumer households which employ this service to maximize the welfare of their family members. However, if the market they face for labor is perfectly competitive, their family firms are organized to maximize the residual profit imputable to themselves, which is consistent with the maximum welfare of their family members since all of their residual profit is transferred to their owner households as seen in section 2.3 of the second chapter. Therefore, the demand function of family firms of these households for capital service proves to be formally identical to the one for the corresponding capitalist firms. However, if the market for labor fails to be perfectly competitive with external employment for their family labor being limited, their demand function for this service turns out not to be formally identical but to be less elastic than the one for the corresponding capitalist firms.

Keywords: Demand Function; Family Firm; Consumption Good; Internal Rate; Market Rate (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:palchp:978-0-230-34668-0_6

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230346680

DOI: 10.1057/9780230346680_6

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().