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Overhead labour and bounded substitutability

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Summary

In this paper we argue that due to the presence of quasi-fixed overhead labour, the aggregate short-run production function of the industry has the property of bounded substitutability. That is, when employing overhead labour, the industry will only be able to earn a positive quasi-rent for a bounded interval of aggregate labour intensity.

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References

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Authors and Affiliations

  1. University of Limburg, Maastricht, The Netherlands

    Joan Muysken (Professor of Economics)

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  1. Joan Muysken
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Additional information

This paper was written during a stay at the State University of New York at Buffalo, with financial support of the Netherlands Organization for the Advancement of Pure Research (ZWO). I am grateful to Professor K. Sato for his stimulating comments.

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Muysken, J. Overhead labour and bounded substitutability. De Economist 132, 440–450 (1984). https://doi.org/10.1007/BF02380342

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  • DOI: https://doi.org/10.1007/BF02380342

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