Abstract
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.
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