A note on input congestion

The notion of effective space is introduced, and input congestion is explained by economic activities’ exhaustion of effective space. In this setting, I show that profit maximization is inconsistent with input congestion at the firm level, but not necessarily with input congestion at the industry level, when effective space is shared among producers.

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Year of publication:	2013
Authors:	Rødseth, Kenneth Løvold
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 3, p. 599-602
Publisher:	Elsevier
Subject:	Congestion \| Firm and industry technologies \| Externalities

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Type of publication:	Article
Classification:	D24 - Production; Capital and Total Factor Productivity; Capacity ; D62 - Externalities ; Q32 - Exhaustible Resources and Economic Development
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011041760