Retornos Ã escala e mercado competitivo: teoria e evidÃªncias empÃricas
The paper develops the concept of return to scale at an elementary level, but rigorously. It is argued that constant and increasing returns are incompatible with competitive markets, because they imply the convergence to few firms, and this is not the case for the real world. The main point is that average cost curve has the shape of a U, and, without restrictions, the firms converge to the branch of decreasing returns. If on the real world is detected increasing or constant returns, it suggests that it should be looked for the market imperfection that are the base of them. And results of increasing or constant returns of econometric models must be taken as a sign of market imperfections. Yet the knowledge of the market imperfections is crucial to design economic policies for economic development with equal opportunities for all. The pattern of six crops showed that the supply is largely in the hands of few farmers, and the great majority of them contribute with a small share of the production. This pattern is clearer for modern crops, as it is the case of soybeans. The results of an econometric model for two groups of small farmers-one with nonnegative profit and the other with negative profit, pointed out increasing returns for the poorer group, and that it was not able to expand production to the cost curve branch of decreasing returns in consequence of market failures.
Volume (Year): 2 (2004)
Issue (Month): 3 ()
|Contact details of provider:|| Postal: Campus Universitário, 36571.000 - Viçosa - MG|
Phone: (031) 899-2215
Fax: (031) 899-2219
Web page: http://www.economia-aplicada.ufv.br/revista/index.php
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:rdeeag:56784. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.