EconPapers    
Economics at your fingertips  
 

Increasing Returns and the Inefficiency of Cost Minimization

Richard Arnott () and Richard Harris

Working Paper from Economics Department, Queen's University

Abstract: This note demonstrates that cost minimization may result in an inefficient allocation of resource if there are multiple techniques of production and one or more techniques exhibit increasing returns to scale. This result is true even if all output are priced at marginal cost. The nature of this inefficiency is explored and an alternative procedure is examined which avoids the inefficiency associated with cost minimization.

Date: 1977
References: Add references at CitEc
Citations: Track citations by RSS feed

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:qed:wpaper:278

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().

 
Page updated 2019-12-19
Handle: RePEc:qed:wpaper:278