search query: @author Willner, J. / total: 4
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| Author: | Willner, J. |
| Title: | Welfare maximisation with endogenous average costs |
| Journal: | International Journal of Industrial Organization
1994 : SEP, VOL. 12:3, p. 373-386 |
| Index terms: | WELFARE COSTS PROFITABILITY |
| Language: | eng |
| Abstract: | In contrast to the earlier literature about industries mixing public and private ownership, costs are not exogenous, because firms choose capacity. If capacity is increased, the fixed costs increase but more can be produced at constant marginal costs. IT turns out that mixing private and public firms improves welfare if the deadweight loss of imperfect competition is significant. All firms break even but welfare maximization implies higher unit costs and lower profitability. |
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