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Interpreting and Enforcing Section 2 of the Capper‐Volstead Act
Author(s) -
Jesse E. V.,
Marion B. W.,
Manchester A. C.,
Johnson Aaron. C.
Publication year - 1982
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240635
Subject(s) - section (typography) , legislature , market power , power (physics) , competition (biology) , economics , undue influence , law and economics , business , microeconomics , public economics , law , monopoly , political science , advertising , ecology , physics , quantum mechanics , biology
Based upon legislative intent, court holdings, and economic theory, undue price enhancement is associated with the exercise of market power. Consequently, a necessary condition for an agricultural marketing cooperative to be in violation of Section 2 is the ability to prevent members from overproducing if market power is exercised. Investigations of undue price enhancement should first determine the extent to which a cooperative possesses potential market power. If such potential exists, the theory of workable competition provides the framework for determining whether price enhancement has become “undue.”