Impacts of Market-Share Patterns on Marketing Firm Costs

Ronald Raikes and Arnold Heubrock

American Journal of Agricultural Economics, 1976, vol. 58, issue 4_Part_1, 693-702

Abstract: Uniform market-share patterns have been assumed in specifying cost functions for assembly or delivery operations. A more realistic assumption is that market share decreases with distance from the plant. Procedures for specifying assembly or delivery-cost functions for alternative linear market-share patterns and for determining impacts of changes in market-share patterns on costs and related results are developed and applied in an analysis of anhydrous ammonia retailing. These procedures permit more accurate estimates of cost-volume relationships and make it possible to address questions about how firms should attempt to achieve volume increases.

Date: 1976
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