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A Model Illustrating Consumer Inconstancy: Demand and Supply Sides
Ariel University Center of Samaria, Ariel, Israel
- 1 Ariel University Center of Samaria, Ariel, Israel
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Abstract
John M. Clark in his classic 1923 Economics of Overhead Costs asks if anyone knows what it costs to supply demand irregularity. He also asks if consumers need demand irregularity, consciously or unconsciously. We provide a model for a plausible theoretical basis to begin to answer each question. The models permit mathematical proofs and graphic demonstrations of the costs to society of supplying for demand irregularity and of the willingness to pay on the part of consumers for demand irregularity. JEL (D24).
KeywordsCompetitive ManufacturingOutput FlexibilityDemand FluctuationsMarginal Cost PricingCost Curves
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