Each participant plays the role of a firm that must make decisions about
inputs to be used in production.
One input determines variable
costs. In addition, a regulation requires a permit for each
unit of output produced (e.g. an emissions allowance).
These permits may be distributed as
an endowment that can
be used, bought, or sold. Using this input incurs an opportunity cost, even
if the input is not purchased.
Learning can be enhanced when relative earnings are provided after some rounds, and
the data graph allows a comparision of supply functions for the person who earned the most
with the supply functions for the person who learned the least.
Copyright 2009, Charles Holt, Please report problems and suggestions:
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Supply (Short Run)
Vecon Lab - June 25, 2019