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ELASTICITY OF SUPPLY AND THE INCENTIVE FOR COLLUSIVE BUYING
Author(s) -
Piggott R. R.
Publication year - 1970
Publication title -
australian journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 0004-9395
DOI - 10.1111/j.1467-8489.1970.tb00571.x
Subject(s) - incentive , price elasticity of demand , price elasticity of supply , microeconomics , elasticity (physics) , demand curve , economics , offset (computer science) , collusion , supply and demand , incentive compatibility , business , monetary economics , computer science , materials science , programming language , composite material
A model is developed to show how changes in the elasticity of the supply function at the farm level offset increased levels of buyer (processor) concentration such that given percentage increases in demand by large buyers result in the same, or smaller, percentage price changes than do increases in demand on the part of small buyers. Since the incentive for collusive buying is a function of the potential price increases which follow demand increases, there may be little incentive for buyers to collude even if they are highly concentrated.