%0 Journal Article
%T MEASURING THE CARTEL'S MARKET POWER
%A Tal Shahor
%J International Journal of Economics and Research
%D 2011
%I Sanben Agency
%X This article proposes a new technique using markup to measure the market power of producers. Markup is the correlation between price and marginal cost (calculated by dividing the price by the marginal cost). The technique used in this study is unique because it enables us to estimate the marginal cost without estimating the production function. Using this technique, the following assumptions can be empirically tested: If firms that are members of a cartel are small enough, and the restrictions applied by the cartel to its members concern the quantity of one of its inputs (and not the marketed quantity), the firms will produce a quantity where the marginal cost will equal the price. Performing such a test requires an exceptionally detailed data base. For this study, I am utilizing the detailed database generated by the banana industry in Israel to test this hypothesis
%K Cartel
%K Mark up
%K Market power
%K price
%K marginal cost
%U http://ijeronline.com/documents/volumes/Vol2%20issue%204/ijer20110204(3).pdf