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Abstract

This paper studies the aggregate substitution and expansion effects triggered by changes in input prices in a context where firms supply a homogeneous commodity and compete in quantities à la Cournot. We derive a sufficient condition for the existence of a Cournot equilibrium and show that this condition also ensures that the Le Chatelier-Samuelson principle is satisfied in the aggregate at the Cournot equilibrium, although it may not be satisfied at the firm level.



Item Type: MPRA Paper -

Original Title: Aggregation with Cournot competition: the Le Chatelier Samuelson principle-

Language: English-

Keywords: Aggregation, returns to scale, market power, markup, own-price elasticity.-

Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: TheoryD - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection-





Author: Koebel, Bertrand

Source: https://mpra.ub.uni-muenchen.de/60476/







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