Campus Units

Economics

Document Type

Article

Publication Version

Published Version

Publication Date

6-2006

Journal or Book Title

International Journal of Production Economics

Volume

101

Issue

2

First Page or Article ID Number

230

Last Page

245

DOI

10.1016/j.ijpe.2004.11.016

Abstract

Programming models approximate market prices and quantities when regulations constrain firm choices, because market outcomes result when welfare is appropriately defined and includes performance and environmental constraints. This study discusses market operation in quality-constrained sectors, like gasoline and additives; processors expand output until marginal processing cost equals the processing margin between product revenues and raw material costs; retailers who buy gasoline and additives from processors and sell blended retail gasoline price sales at a marginal cost that includes the blended input value plus adjustments for values of constrained attributes; and market supplies and demands of measurable attributes like octane are balanced. This method can enhance predictions about the effects of new policies that regulate product quality. Analysis can now include price and output adjustment in factor and product markets, and the competitiveness of new processes and products.

Comments

This is an article from International Journal of Production Economics 101 (2006): 230, doi: 10.1016/j.ijpe.2004.11.016.

Rights

Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.

Language

en

File Format

application/pdf

Working Paper

Share

COinS