02618cam a2200421 i 4500 rnd000000000047115 RAND 920212s1981 caua a b b000 0 eng d 81010713 0833003321 (pbk.) RAND/R-2634-DOE/RC (Sirsi) a188080 $23.00 CstmoR CstmoR n-us--- HD9560.6 .C29 1981 Camm, Frank A., 1949- author. Resource allocation under the COWPS price guideline : the case of fixed proportions / Frank Camm, Charles E. Phelps, P. J. E. Stan. Resource allocation under the Council of Wage and Price Stability price guideline Santa Monica, CA : RAND, 1981. xv, 45 pages : illustrations ; 28 cm text txt rdacontent computer c rdamedia unmediated n rdamedia online resource cr rdacarrier volume nc rdacarrier "May 1981." Includes bibliographical references (p. 45). Evidence points toward the Council of Wage and Price Stability (COWPS) price guidelines as the constraint causing U.S. petroleum refinery shortages during 1979-1980. This report develops the theory of a profit-maximizing firm's behavior when complying with a COWPS-like restraint. Results include: (1) When the production technology displays a certain type of fixed proportions (as appears relevant for refineries), shortages can--but need not--emerge. (2) Product output decreases in response to the COWPS control, causing market prices to rise. (3) Product supply diminishes as market demand increases. (4) Use of some factors, e.g., crude oil, increases as factor prices increase, which, because of fixed proportions, implies expanded product output. (5) Product mix likely shifts towards lower-grade products. (6) Dispersion of product prices across firms increases. (7) Relative product prices for a multiproduct firm become indeterminant. Casual empirical evidence supports the relevance of this theory. Also available on the internet via WWW in PDF format. Description based on print version record. Petroleum industry and trade Government policy United States. Petroleum products Prices United States. Phelps, Charles E. author. Stan, Peter J. E., 1955- author. Rand Corporation. United States. Department of Energy. Online Access http://www.rand.org/pubs/reports/R2634/ 599608 599608