Fixed cost, variable cost and markup

  • DATE / TIME :
    2012•06•28    12:30 - 13:30
    Location :

    Joint UNU-MERIT/School of Governance Seminar: “Fixed cost, variable cost and the markup”

    The distinction between fixed and variable costs, while fundamental, is quite neglected in production analysis. Few theoretical contributions have studied the substitutability between fixed and variable inputs. Empirically, most specifications of production and cost functions assume that fixed costs are nonexistent.

    Extend the usual production function in order to allow each input to have a fixed and a variable part reveals that fixed costs can be either exogenous or endogenous. This seminar, featuring Prof. Bertrand Koebel of the University of Strasbourg, characterizes and estimates both fixed and variable components of the cost function, investigates their heterogeneity over firms, and studies how fixed costs affect firm behaviour in terms of price setting and input demand.

    About the speaker

    Bertrand Koebel is Professor of Economics at the Faculty of Economics and Management, University of Strasbourg, and a member of the research lab BETA. His research is related to production analysis (duality, imperfect competition, technical change); econometrics (demand system specification, inequality constraints, nonlinear models); and labour economics (impact of technological change and international trade on skill groups).

    For more information please see the Calendar of upcoming events on the UNU-MERIT website.