Transportation rates, monopsony power and the location decision of the firm

Yeung-Nan Shieh (ynshieh@yahoo.com) and Chiou-Nan Yeh (cyeh@asunet.alasu.edu)
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Chiou-Nan Yeh: Alabama State University

Economics Bulletin, 2004, vol. 18, issue 1, 1-7

Abstract: This paper investigates the impact of monopsony power on the location decision of the firm. It shows that if the transportation rates are a function of distance only and the production function is homogeneous of degree one, the optimum location is independent of monopsony power. However, if the transportation rates are a function of quantity shipped and distance traveled, a homogeneous production of degree one does not ensure independence between the optimum location and monopsony power. This result is significantly different from the well-known Mai-Suwanakul-Yeh proposition in the constant transportation case.

Keywords: Firm; location (search for similar items in EconPapers)
JEL-codes: J4 R3 (search for similar items in EconPapers)
Date: 2004-01-13
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Citations: View citations in EconPapers (2)

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