A monopolist that can continuously adjust his nominal price will set the price to equate contemporaneous marginal revenue and marginal cost
and the price will be a markup over marginal cost
Where [y.sup.f.sub.t] is the flexible price equilibrium output and [eta] is the output elasticity of real marginal cost
, [Gali and Gertler (1999)].
With these observations in mind, suppose we consider an unexpected innovation that not only reduces a defendant's marginal costs
of abatement but also simultaneously causes us to revise our expectations of future technological progress.
the courts would be required to monitor adherence to marginal cost
For example, suppose the marginal cost
for firm 2 in the asymmetric model is 30 recalling that the marginal cost
for firm 1 is 40.
We estimate key cost parameters using Indonesian plant-level data, and find robust support for the view that exporting firms are operating with increasing marginal cost
Banks use marginal cost
of funds when there is sufficient liquidity available at that rate to fund a reasonable proportion of the asset portfolio.Aditya PuriMD and CEO, HDFC Bank
However, as it applies discriminatory pricing, it would not influence the payoff of producers that bid their true marginal cost
. Thus producers in the export-constrained node 1 would find it profitable to change their offers downwards.
Andersson & Ogren (2007) state that in order to achieve a competitive transport sector, infrastructure charges in the European Union should be based on short-run marginal costs
. Freebairn, (1998) assesses marginal cost
, average cost, Ramsey prices and multipart tariff rules for access pricing.
Ananda Bhoumik, senior director, banks, India Ratings, says, "The recommendation that banks compute their lending rate based on their marginal cost
of funds and not on the weighted average cost could increase the volatility of the base rate, particularly for banks with higher dependence on bulk short-term deposits.
We depict this idea in the following way: The bigger the difference between the tax transfer price [q.sup.T] and the marginal cost
c, the bigger the marginal cost
of defending the difference.
In recent work with Severin Borenstein, I use nationally representative data to calculate the distributional impact of a transition to marginal cost
pricing in U.S.