ajaz_eco_204_2012_2013_chapter_16_Market_Power

However in this data set we do not have figures on

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Unformatted text preview: … 68 68 68 0.09001 … … 0.25259 0.25259 0.25259 104 … … 149 150 151 35,064 …. …. 2,160 2,376 3,168 576 … … 4,608 3,816 2,304 0.021 … … 0.030 0.030 0.028 0.030 … … 0.030 0.028 0.030 0.017 … … 0.025 0.025 0.023 0.025 … … 0.025 0.022 0.025 68 0.25259 152 2,880 432 0.030 0.039 0.025 0.031 Let’s estimate a “cost model” for diet variety of brand X. In the PTC case, we made a scatterplot of total cost vs. output, guessed the functional form of the equation, ran the appropriate regression and interpreted the intercept as the . However, in this data set, we do not have figures on the total cost and unlike the PTC case cannot estimate the cost function (why not?). Rather, we can assume constant returns and estimate the total variable cost function: Note: the function cannot have an intercept and here the function is linear because we assumed constant returns (had we assumed, say, decreasing returns the model would’ve been ). Note that is a special of the gener...
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This document was uploaded on 01/19/2014.

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