MARKET EQUILIBRIUM WITH RANDOM PRODUCTION

This paper investigates competitive equilibrium when production is subject to random deviations from. intended output. We find that the most commonly used specification of equilibrium price and output -- the intersection of the demand function and the intended supply function -- is incorrect. This result has possibly - important implications for some areas of current interest, including the literature on gains from price stabilization and the empirical modeling of supply response to risk.


Subject(s):
Issue Date:
1979-07
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/278368
Language:
English
Total Pages:
12




 Record created 2018-10-17, last modified 2020-10-28

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