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Demand shifts and imperfect competition

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  • Simon GB Cowan
  • Simon Cowan

Abstract

The effects of demand shifts on output, price and profits in imperfectly competitive industries with no entry or exit are derived. Four types of demand shift are modelled: additive and multiplicative shifts of the demand and inverse demand functions. Necessary and sufficient conditions for output, price and profits to increase with an outward demand shift are derived for each case. Either output or the price, but not both, may fall with a positive demand shift. Profits may also fall for a Cournot oligopoly. Log-concavity of the direct demand function is sufficient for the standard results to go through.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 188.

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Date of creation: 01 Mar 2004
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Handle: RePEc:oxf:wpaper:188

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Related research

Keywords: Comparative Statics; Monopoly; Oligopoly; Log-concavity.;

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Cited by:
  1. David, Maia & Nimubona, Alain-Désiré & Sinclair-Desgagné, Bernard, 2011. "Emission taxes and the market for abatement goods and services," Resource and Energy Economics, Elsevier, vol. 33(1), pages 179-191, January.
  2. Jesse M. Cunha & Giacomo De Giorgi & Seema Jayachandran, 2011. "The Price Effects of Cash Versus In-Kind Transfers," NBER Working Papers 17456, National Bureau of Economic Research, Inc.
  3. Özelkan, Ertunga C. & ÇakanyIldIrIm, Metin, 2009. "Reverse bullwhip effect in pricing," European Journal of Operational Research, Elsevier, vol. 192(1), pages 302-312, January.
  4. Han, Sungill & Chung, Chanjin & Suh, Daeseok, 2011. "Generic Advertising in Concentrated and Differentiated Agricultural Markets," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103739, Agricultural and Applied Economics Association.

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