ABSTRACT
The equilibrium conditions for a bureau, for given demand and cost conditions, provide the basis for evaluating the effects of changes in these conditions. This chapter demonstrates that the equilibrium output and budget of a bureau are higher than for a competitive industry facing the same demand and cost conditions. A bureau, like a profit-seeking monopoly, often finds it rewarding to attempt to shift its demand function. The increased budget that would result from a demand shift is particularly high in the demand-constrained output region. A bureau that faces a highly elastic demand function produces an output only slightly higher than a competitive industry at a budget per unit of output that is also only slightly higher. In the budget-constrained region, the equilibrium output of a bureau which pays competitive factor prices declines in response to an increase in the slope of the minimum marginal cost function, under conditions where the output of a competitive industry would be constant.
