An upstream monopoly with transport costs

John Heywood and Zheng Wang ()
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Zheng Wang: Capital University of Economics and Business

Journal of Economics, 2023, vol. 139, issue 2, No 3, 159-176

Abstract: Abstract We analyze equilibrium locations of downstream retailers assuming transport cost from a monopoly input supplier. When the upstream transport costs equal those of retailers, a downstream monopoly may locate efficiently and two downstream firms never locate inefficiently. Even with discriminatory pricing upstream, two downstream firms locate efficiently. When assuming downstream transport costs are greater than upstream costs, routinely inefficient locations reemerge in keeping with previous literature.

Keywords: Transport costs; Upstream monopoly; Spatial price discrimination (search for similar items in EconPapers)
JEL-codes: L13 L41 R32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:139:y:2023:i:2:d:10.1007_s00712-023-00820-3

DOI: 10.1007/s00712-023-00820-3

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