Testing Market Power with Profit Functions: a Dual Approach with Normalized Quadratic

Zhifeng Gao and Charles Moss

No 143105, 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida from Southern Agricultural Economics Association

Abstract: The dual relationship between parameters of normalized quadratic cost and profit functions is determined when firms can implement market power on the output market. An approach is developed to test the market power by comparing the profits of a firm with and without market power. Simulations demonstrate the efficiency of this approach.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 11
Date: 2013-02-02
New Economics Papers: this item is included in nep-com, nep-eff and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea13:143105

DOI: 10.22004/ag.econ.143105

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