On a general existence theorem for marginal cost pricing equilibria (Q1082233)

If in the Arrow-Debreu model of competitive equilibrium non-convexities of production technologies are permitted, an appropriate generalization of the equilibrium concept is one which postulates marginal cost pricing by firms. This paper contains a generalization of the earlier results on the existence of these marginal cost pricing equilibria. In particular, the paper utilizes the tangent and normal cones at points of production sets in the description of the marginal cost pricing rule in contrast to other less general concepts in earlier work. In addition to the existence theorem the paper provides a new sufficient condition for productive efficiency of marginal cost pricing equilibria.