Files

Action Filename Size Access Description License
Show more files...

Abstract

Students in economics are taught that the optimal usage of a nundurable input occurs when the value of its marginal product (VMP) equals its marginal cost (MC). However, this fundamental condition has rarely been extended to durable inputs. Even advanced textbooks have done little to compare and contrast the optimality conditions for durables versus nondurables. This paper outlines and compares a common VMP-MC decision for (1) nondurables in a single-period time horizon, (2) durables in a finite planning horizon, and (3) durables in an infinite planning horizon.

Details

Downloads Statistics

from
to
Download Full History