MEASURING THE QUANTITIES OF FIXED FACTORS.
STANFORD UNIV CALIF INST FOR MATHEMATICAL STUDIES IN THE SOCIAL SCIENCES
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In a certain economy there are a number of variable goods, whose efficiency prices are the same in all firms, and of fixed inputs for which this need not be so. These fixed inputs fall into classes called factors. In the paper necessary and sufficient conditions are found for the existence of quantities of these fixed factors in terms of which the production possibilities facing the economy as a whole can be specified. It turns out to be convenient to measure them in terms of their capacity to earn profits that if so, analogous aggregates exist for each firm in terms of which its production possibilities can be specified, and that the quantities in the economy as a whole are the sums of those in the individual firms. The conditions for this to be possible are restrictive. In particular they imply that an extra unit of equipment, for instance, will be used in exactly the same way whichever firm gets its. Author
- Economics and Cost Analysis