MEASUREMENT OF CAPACITY UTILIZATION FOR REVENUE‐MAXIMIZING FIRMS * | Zendy

Segerson Kathleen | Zendy; Squires Dale | Zendy

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MEASUREMENT OF CAPACITY UTILIZATION FOR REVENUE‐MAXIMIZING FIRMS *

Author(s) -

Segerson Kathleen,

Squires Dale

Publication year - 1995

Publication title -

bulletin of economic research

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.227

H-Index - 29

eISSN - 1467-8586

pISSN - 0307-3378

DOI - 10.1111/j.1467-8586.1995.tb00602.x

Subject(s) - revenue , microeconomics , marginal revenue , maximization , elasticity (physics) , economics , product (mathematics) , dual (grammatical number) , econometrics , revenue management , price elasticity of demand , scale (ratio) , industrial organization , mathematics , finance , art , materials science , geometry , literature , composite material , physics , quantum mechanics

A dual measure of capacity utilization is developed for multiproduct, revenue‐maximizing firms. Under the assumption of revenue maximization, the sensitivity of CU to a change in an individual product price is shown to be directly related to the product‐specific scale elasticity. The results are given a simple graphical interpretation.

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