Premium
The Farm‐Retail Price Spread in an Imperfectly Competitive Food Industry
Author(s) -
Holloway Garth J.
Publication year - 1991
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 - 10.2307/1242425
Subject(s) - oligopoly , competition (biology) , comparative statics , commodity , economics , food industry , microeconomics , business , food science , market economy , biology , ecology , cournot competition
Gardner's popular model of perfect competition in the marketing sector is extended to a conjectural‐variations oligopoly with endogenous entry. Revising Gardner's comparative statics on the “farm‐retail price ratio,” tests of hypotheses about food industry conduct are derived. Using data from a recent article by Wohlgenanr, which employs Gardner's framework, tests are made of the validity of his maintained hypothesis—that the food industries are perfectly competitive. No evidence is found of departures from competition in the output markets of the food industries of eight commodity groups: ( a ) beef and veal, ( b ) pork, ( c ) poultry, ( d ) eggs, ( e ) dairy, ( f ) processed fruits and vegetables, ( g ) fresh fruit. and ( h ) fresh vegetables.