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Applied Economics Letters Volume 3, 1996 - Issue 11
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Original Articles

Non-convex cost and the behaviour of inventories: some disaggregate results

Erkin I. Bairam Department of Economics, University of Otago, Box 56, Dunedin, New Zealand
Pages 687-691 | Published online: 05 Oct 2010
 
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Abstract

The disaggregate results reported here show that the marginal costs are increasing over time and, therefore, the main foundation of the law of supply is still valid. This implies that some other explanation has to be found to explain why firms bunch rather than smooth production.

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