Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75108
Authors: 
Rauscher, Michael
Year of Publication: 
1986
Series/Report no.: 
Diskussionsbeiträge, Serie A: Volkswirtschaftliche Beiträge, Fakultät für Wirtschaftswissenschaften und Statistik, Universität Konstanz 220
Abstract: 
In a dynamic optimisation model the profit maximising behaviour of a monopolist facing lagged adjustments of demand is investigated. It is shown that the long run equilibrium price differs from the static Cournot price. The monopolist sacrifices some of the long run profits in order to exploit the short run inelasticity of demand. If applied to OPEC and the world petroleum market, the model is able to explain the ups and downs of the oil price during the seventies and eighties.
Document Type: 
Working Paper

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