John M. Clark in his classic 1923 Economics of
Overhead Costs asks if anyone knows what it costs to supply demand
irregularity. He also asks if consumers need demand
irregularity, consciously or unconsciously. We provide a model for a plausible
theoretical basis to begin to answer each question. The models permit
mathematical proofs and graphic demonstrations of the costs to society of
supplying for demand irregularity and of the willingness to pay on the part of
consumers for demand irregularity. JEL(D24).
References
[1]
G. Aranoff, “John M. Clark’s Concept of Too Strong Competition and a Possible Case: The U.S. Cement Industry,” Eastern Economic Journal, Vol. 17, No. 1, 1991, pp. 45-60.
[2]
J. M. Clark, “Studies in the Economics of Overhead Costs,” The University of Chicago Press, Chicago, 1923.
[3]
G. Aranoff, “Competitive Manufacturing with Fluctuating Demand and Diverse Technology: Mathematical Proofs and Illuminations on Industry Output-Flexibility,” Economic Modelling, Vol. 28, No. 3, 2011, pp. 1441-1450. http://dx.doi.org/10.1016/j.econmod.2011.02.016
[4]
G. Aranoff, “A Mathematical Proof: Focus during Weekdays Should be on Supply for the Sabbath a Support for Workable Competition,” Modern Economy, Vol. 3, No. 8, 2012, pp. 926-930. http://dx.doi.org/10.4236/me.2012.38116
