A Simple Characterization of Supply Correspondences
Alexey Kushnir, Vinod Krishnamoorthy
TL;DR
This paper characterizes supply correspondences using two fundamental properties, simplifying their understanding in economic theory.
Contribution
It provides a simple characterization of supply correspondences based on the law of supply and homogeneity of degree zero.
Findings
Supply correspondences are fully characterized by two properties.
The law of supply and homogeneity of degree zero are necessary and sufficient.
Simplifies analysis of supply functions in economic models.
Abstract
We prove that supply correspondences are characterized by two properties: the law of supply and being homogeneous of degree zero.
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Taxonomy
TopicsAdvanced Algebra and Logic · Mathematical and Theoretical Analysis · Functional Equations Stability Results