Horsley, Anthony and Wrobel, Andrew J. (2000) The short-run approach to LRMC pricing for multiple outputs with nondifferentiable costs. TE, 393. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science, London, UK.
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Using convex calculus, we extend the Wong-Viner Theorem to nondifferentiable costs by equating the capital inputs' rental prices to their profit-imputed marginal values. Thus extended, the short-run approach to LRMC pricing is applied to peak-load pricing with storage.
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