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The Incremental Surplus Subsidy and rate-of-return regulation

✍ Scribed by B. Glenn Blackmon


Publisher
Springer US
Year
1992
Tongue
English
Weight
553 KB
Volume
4
Category
Article
ISSN
0922-680X

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Here it is shown how capital waste can be motivated under rate-of-return regulation, even when the marginal product of capital is positive. This result means that the sign of the marginal product of capital is not adequate as a basis for defining waste. The wasteful use of capital is motivated to av