Fixed Cost, Variable Cost, Markups and Returns to Scale

Xi Chen and Bertrand Koebel
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Xi Chen: STATEC - Institut National de la Statistique et des Etudes Economiques - Institut de Luxembourg, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper derives the structure of a production function which is necessary and sufficient for generating a fixed cost. We extend the classical production function in order to allow each input to have a fixed and a variable part. We characterize and estimate both the fixed and variable components of the cost function and study how fixed and variable costs interact and affect firms' behavior in terms of price setting and returns to scale.

Keywords: Identification; Imperfect Competition; Unobserved Heterogeneity (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

Published in Annals of Economics and Statistics, 2017, 127, pp.61-94. ⟨10.15609/annaeconstat2009.127.0061⟩

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Related works:
Journal Article: Fixed Cost, Variable Cost, Markups and Returns to Scale (2017)
Working Paper: Fixed cost, variable cost, markups and returns to scale (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02166757

DOI: 10.15609/annaeconstat2009.127.0061

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