Free Disposal

  • Ted Bergstrom
Part of the The New Palgrave book series (NPA)


If I dislike a commodity, you may have to pay to get me to accept it. But so long as some otherwise non-sated consumer finds this commodity to be desirable, or at least harmless, it could not have a negative price in competitive equilibrium. Likewise, if some firm can dispose of arbitrary amounts of a commodity without using any other inputs or producing any other (possibly noxious) outputs, its price in competitive equilibrium cannot be negative. Therefore competitive equilibrium analysis can be confined to the case of non-negative prices if every commodity is either harmless to someone or freely disposable.


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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1989

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  • Ted Bergstrom

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