This paper provides a theoretical model in which the firms within a processing industry behave in an oligopolistic and oligopsonistic market simultaneously. The model developed yields an equation for profit margin influenced by determinants of marginal processing cost as well as distortions in both markets. By pooled cross section and time series data, the equation is estimated for eleven sugar factories involved in Tehran Exchange Market over the period of ١٩٩٦-٢٠٠٣. Applications for both markets indicate that with an increase in both the input share and output share, it causes an increase in the profit margin; however, it reduces due to increasing in wages fuel and energy costs. With competitive oligopsonistic market, the collusion degree initiated by Clarke and Davies (١٩٨٢) in oligoppolistic market is estimated. It turns out that the collusion parameter is lower and negligible since price elasticity of demand is a faction for the quasi price elasticity, but by considering only quasi price demand elasticity, the degree of collusion is estimated to be higher.
Ahmadian, M., & Motafaker Azad, M. A. (2005). Determinants of Profitability in Oligopoly and Oligopsony Markets. Journal of Iran's Economic Essays (JIEE), 2(4), 11-33.
MLA
Majid Ahmadian; Mohamd ali Motafaker Azad. "Determinants of Profitability in Oligopoly and Oligopsony Markets". Journal of Iran's Economic Essays (JIEE), 2, 4, 2005, 11-33.
HARVARD
Ahmadian, M., Motafaker Azad, M. A. (2005). 'Determinants of Profitability in Oligopoly and Oligopsony Markets', Journal of Iran's Economic Essays (JIEE), 2(4), pp. 11-33.
VANCOUVER
Ahmadian, M., Motafaker Azad, M. A. Determinants of Profitability in Oligopoly and Oligopsony Markets. Journal of Iran's Economic Essays (JIEE), 2005; 2(4): 11-33.
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