Strictly convex variable cost does not imply U-shaped average cost
- Autori: Balletta, L.; Tesoriere, A.
- Anno di pubblicazione: 2016
- Tipologia: Articolo in rivista (Articolo in rivista)
- Parole Chiave: Convex costs; Endogenous entry; Fixed costs; U-shaped average costs; Economics and Econometrics
- OA Link: http://hdl.handle.net/10447/230957
Abstract
We show that strictly convex variable costs do not imply U-shaped average costs and provide a sufficient condition for U-shaped average costs. As an application we study endogenous entry when firms have market power and they have decreasing average cost but increasing marginal cost.