Tuesday, September 6, 2011

Dixit stig revisited

How about the production system here

We have a product space of limitless extent on either side of a n dimensional product and between any two n dimensional products

The production system has a nut plus a level labor cost related output capacity
The nut might be the cost of market entry position consolidation product r and d
Ie no fixed cost in production itself
But the form looks like

Q = sunk costs plus fixed costs plus wage costs where the first two are lumps to be serviced and depreciated where appropriate

No economies of scope
But obviously variable unit cost is constant and equal to some parametric value x labor hours and the unit Cost is linearly falling thru out the production q
by the spread of the fixed and sunk costs over more units

The final demand side here holds tricks too
Including the famous preference for variety

Question have these shadow referents in the oz economy been fully enough detailed
To expose any and all sleight of hands that betray oz is not in any sense
an analogy to Kansas

A useful application

To match the formal model's analytic completeness

Analytical tightness is only secondary to the desire for analytical results ie truths about market and production systems that can serve in the war between the various economic class based idoelogians