The LeChatelier principle: the long and the short of it

Citation
W. Suen et al., The LeChatelier principle: the long and the short of it, ECON THEORY, 16(2), 2000, pp. 471-476
Citations number
8
Language
INGLESE
art.tipo
Article
Categorie Soggetti
Economics
Journal title
ECONOMIC THEORY
ISSN journal
0938-2259 → ACNP
Volume
16
Issue
2
Year of publication
2000
Pages
471 - 476
Database
ISI
SICI code
0938-2259(200009)16:2<471:TLPTLA>2.0.ZU;2-S
Abstract
Using ordinary calculus techniques, we investigate the conditions under whi ch LeChatelier effects are signable for finite changes in parameter values. We show, for example, that the short run demand for a factor is always les s responsive to price changes than the long run demand, provided that the f actor of production and the fixed factor do not switch from being substitut es to being complements (or vice versa) over the relevant range of the pric e change. The absence of a sign change in the complementarity/substitutabil ity relation holds under conditions that are considerably more general than supermodularity of the production function.