Are John M. Clark Business Cycles Insights Still Relevant Today? | Chapter 2 | An Overview on Business, Management and Economics Research Vol. 6

 The object concerning this study is to equate numerical results for a thought experiment of the commerce of business phases with pictorial demand and cost curves. This is a pure theoretical model stimulated by the manuscripts of John M. Clark (1884-1963). This study models a hypothetic cement industry, product Q. The plant property are assumed long-lasting, to last for 50 years, and distinguishing to manufacturing only one device, Q The model, with allure rigid acceptances, shows that industry composed of only up-to-date low established-cost Plants K will increase the amplitude of implausible story cycle, the range of industry outputs middle from two points peak and off-peak, versus an manufacturing composed of only traditional high fixed-cost Plants L. The model shows a certain aspect of established costs: that one can wish that industry with extreme fixed costs to have diminished amplitude of killing cycle. Some can find this a surprising result.

Author(s) Details:

Gerald Aranoff,
Ariel University, Ariel 40700, Israel.

Please see the link here: https://stm.bookpi.org/AOBMER-V6/article/view/12671

A Model of Manufacturers and Buyers of Cars Over the Business Cycle Illustrating Competitive Manufacturing: Advanced Study | Chapter 3 | Current Strategies in Economics and Management Vol. 2

I illustrate competitive manufacturing with a simple numerical model of manufacturers and buyers of carsoverabusinesscyclewithoff-peakandpeakdemandperiods. Mymodelhastwotypesofplants manufacturing cars, plantK and plantL, each having linear total costs with absolute capacity limits. PlantK operates with low VC and high FC. PlantK, because of its low VC, produces continuously at capacity in off-peak and in peak periods. PlantL, because of its high VC, shut-downs in off-peak periods and produces at capacity in peak periods. I show results under perfect competition SRMC pricing. I prove mathematically two propositions with this model. Proposition I shows mathematically the conditions of investor indifference to choose between PlantsK and PlantsL. The significance is to show a positive aspect of PlantsL, its output-rate flexibility, that some may overlook. Proposition II shows mathematically the conditions that shifting consumption of car purchases from off-peak to peak necessarily adds to consumer surplus. The significance is to show the importance of increasing consumer purchases in peak periods. These two propositions are intuitive and common sense.

Author(s) Details

Gerald Aranoff
Professor of Accounting, Bnei Brak, Israel.

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