#1990-003A "Optimal Monopoly Investment and Capacity Utilization under Random Demand"
by David B. Nickerson, and Stanley S. Reynolds
April 1990

Unique value-maximizing programs of irreversible capacity investment and capacity utilization are described and shown to exist under general conditions for monopolist exhibiting capital adjustment costs and serving random consumer demand for a nondurable good over an infinite horizon. Stationary properties of these programs are then fully characterized under the assumption of serially independent demand disturbances. More...