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Factor Price Equalization under Imperfect Competition
Author(s) -
Kemp Murray C.,
Okawa Masayuki
Publication year - 1997
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00047
Subject(s) - economics , imperfect competition , commodity , oligopoly , factor price , equalization (audio) , competition (biology) , returns to scale , imperfect , microeconomics , economies of scale , production (economics) , market economy , cournot competition , computer science , computer network , ecology , channel (broadcasting) , linguistics , philosophy , biology
The paper describes a class of imperfectly competitive world economies for which factor price equalization is inevitable. Specifically, it is shown that factor price equalization must prevail if the trading economies differ at most in scale, if they share a constant‐returns no‐joint‐products technology, and if each oligopolistic industry produces a commodity which, directly or indirectly, is internationally tradable.