Although the marginal unit of output may be sold at a price equal to marginal cost, the firms profit on all inframarginal
units of production.
However, the efficiency loss for the economy as a whole might be small because misallocations at the margin are relatively costless compared with the high marginal products of inframarginal
labor input units.
In fact, if the profit margin on incremental sales is particularly high, the increased profit on incremental sales may largely offset the decreased revenues from inframarginal
consumers when price is reduced.
All of these factors may imply that most DOD SEs earn large rents for working at the DOD and are inframarginal
with respect to pay levels.
Using the Spence-Comanor argument concerning the possible existence of so-called inframarginal
consumers (who do not value quality changes initiated by producers as much as do marginal consumers), BF show that RPM can cause welfare to decline.
Economists described the combination of price controls on domestic old oil and the entitlements program as a tax-and-subsidy scheme, in which the inframarginal
units of old oil wells were taxed to provide a revenue-neutral subsidy to new domestic sources and foreign imports of crude oil.
Bester and Petrakis (2003) and Hellwig and Irmen (2001) show that persistent innovation can be driven by the inframarginal
rents obtained by competitive firms in the short run.
1029, 1064 (2014) ("One of the thorniest problems for any tax incentive is the problem of inframarginal
behavior, or behavior that would have occurred absent the tax incentive.
The taxon analyzed lacks intergular and inframarginal
The difference between $9 and $22 makes sense, because it reflects the fact that only half the population is employed, and the leisure time spent on the Internet is inframarginal
This is easily seen in Figure 4, which shows the case where the quality increase is more valued by marginal customers than by inframarginal
customers, but the range of possibilities is limitless and the information requirements about consumers' valuations in order to perform the benefits calculation are insurmountable.
This means that at least half of the increased degree completion came from inframarginal
students, those who would have enrolled even in the absence of the program but due to the aid faced lower costs than they otherwise would have.