Abstract
This chapter presents a positive model of a static market economy with competitive features, in spite of the presence of increasing returns to scale. The key concept in the analysis will be that of a classical equilibrium. A classical equilibrium consists of a price vector and an allocation such that supply equals demand, and all active firms are equally profitable (where the common rate of return is the highest one attainable at these prices).
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© 1996 Springer-Verlag Berlin Heidelberg
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Villar, A. (1996). Classical Equilibrium. In: General Equilibrium with Increasing Returns. Lecture Notes in Economics and Mathematical Systems, vol 438. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-00457-9_10
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DOI: https://doi.org/10.1007/978-3-662-00457-9_10
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-61152-3
Online ISBN: 978-3-662-00457-9
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