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A Closer Look at the Comparative Statics in Competitive Markets

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  • José Ramón Ruiz-Tamarit
  • Manuel Sánchez-Moreno

Abstract

In this paper we revisit the dual approach to comparative statics in competitive markets, allowing for the essential results to arise from a comprehensive and unified framework. We study, for both the long-run and the short-run, the response of all the endogenous variables to price factor changes in a way that captures the outputprice effects arising from market-firm interactions. We show that it is necessary a richer characterization of the nature of factors with respect to output, connected with marginal cost and output demand elasticities, for completely determining such responses.

Suggested Citation

  • José Ramón Ruiz-Tamarit & Manuel Sánchez-Moreno, "undated". "A Closer Look at the Comparative Statics in Competitive Markets," Working Papers 2005-13, FEDEA.
    • Handle: RePEc:fda:fdaddt:2005-13
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    File URL: https://documentos.fedea.net/pubs/dt/2005/dt-2005-13.pdf
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    References listed on IDEAS

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    1. Braulke, Michael, 1987. "On the Comparative Statics of a Competitive Industry," American Economic Review, American Economic Association, vol. 77(3), pages 479-485, June.
    2. D. V. T. Bear, 1965. "Inferior Inputs and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 73(3), pages 287-287.
    3. Heiner, Ronald A, 1982. "Theory of the Firm in "Short-Run" Industry Equilibrium," American Economic Review, American Economic Association, vol. 72(3), pages 555-562, June.
    4. Lowell R. Bassett & Thomas E. Borcherding, 1970. "The Firm, the Industry, and the Long-Run Demand for Factors of Production," Canadian Journal of Economics, Canadian Economics Association, vol. 3(1), pages 140-144, February.
    5. Braulke, Michael, 1984. "The Firm in Short-run Industry Equilibrium: Comment," American Economic Review, American Economic Association, vol. 74(4), pages 750-753, September.
    6. Ferguson, C E & Saving, Thomas R, 1969. "Long-Run Scale Adjustments of a Perfectly Competitive Firm and Industry," American Economic Review, American Economic Association, vol. 59(5), pages 774-783, December.
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    Cited by:

    1. Pedro N. Rodríguez, & Simón Sosvilla-Rivero, 2006. "Understanding and Forecasting Stock Price Changes," Working Papers 2006-03, FEDEA.
    2. Namkee Ahn, "undated". "Life Satisfaction among Spanish Workers: Importance of Intangible Job Characteristics," Working Papers 2005-17, FEDEA.
    3. Andrés J. Marchante Mera & Bienvenido Ortega Aguaza & José Sánchez Maldonado, 2006. "Las dimensiones del bienestar en las Comunidades Autónomas Españolas. Un análisis de Sigma y Gamma-Convergencia," Working Papers 2006-05, FEDEA.

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