the case of fixed proportions Camm, Frank A. 1949- creator author. Phelps, Charles E. author. Stan, Peter J. E. 1955- author. Rand Corporation United States Department of Energy. text bibliography cau 1981 monographic eng

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xv, 45 pages : illustrations ; 28 cm 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. preschool Frank Camm, Charles E. Phelps, P. J. E. Stan. "May 1981." Includes bibliographical references (p. 45). Also available on the internet via WWW in PDF format. n-us--- Petroleum industry and trade Government policy United States Petroleum products Prices United States HD9560.6 .C29 1981 0833003321 (pbk.) 81010713 http://www.rand.org/pubs/reports/R2634/ http://www.rand.org/pubs/reports/R2634/ CstmoR 920212 rnd000000000047115