An Instructional Exercise in Cost-Raising
Strategies and Perfect Complements
Production
Publication: Journal of Economic Education
Volume: Volume 38, No. 2
Issue: Spring 2007
Pages: forthcoming
Author(s): Dennis L. Weisman
Address:
Dennis L. Weisman
Professor
Department of Economics
Kansas State University
Manhattan, KS 66506-4001
Phone: (785) 532-4588
Fax: (785) 539-7225
Internet Address: weisman@ksu.edu
Title: An Instructional Exercise in Cost-Raising Strategies and Perfect Complements
Production
Abstract: An account of the contract negotiations between United Auto Workers (UAW)
and Ford Motor Company is presented to assist students in developing facility with
perfect complements production/cost functions and cost-raising strategies. Specifically,
this discussion suggests that the UAW targeted Ford because it was more likely to go
along with a liberal wage and benefits package given its investment in robotics.