main reason for this loss is due to inframarginal
producers, who would
83) also saw that entrepreneurs of "inframarginal
" firms earn differential rents depending on their abilities and these rents exceed the rent that "will suffice to attract into the industry the marginal entrepreneur." (5)
Under the framework adopted in this section, this would be the case when the constant rate of economic rents (er) assumed for the marginal dollar of investment is a declining function of the scale of inframarginal
Price erosion provides a second reason for low incremental revenues: reduced revenue from inframarginal
units that the defendant otherwise would have sold at a higher price.
A plausible explanation for this outcome is that fraternity membership has a larger impact on social capital formation for marginal members than it has for inframarginal
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.
However, for projects that yield above-market inframarginal
returns that are not scalable, the government collects a share of these returns.
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
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.
A subfield in the economics of public finance begins with the ingenious idea that an "optimal tax" is one that introduces no distortion at the margin; a 0% marginal rate is desirable, with revenue collected on inframarginal
income derived from work that is unlikely to be reduced in favor of leisure.