Measurement of Capacity Utilization for Revenue-Maximizing Firms
A dual measure of capacity utilization is developed
for multiproduct, revenue-maximizing firms. Under the assumption of revenue
maximization, the sensitivity of CU to a change in an individual
price is shown to be directly related to the product-specific
scale elasticity. The results are given a simple graphical interpretation.
Source: Segerson, K. and D. Squires. 1995. “Measurement of capacity
utilization for revenue-maximizing firms.” Bulletin of Economic
Research, 47(1): 77-84.
For more information, please contact: Dale.Squires@noaa.gov