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Transportation rates, monopsony power and the location decision of the firm

Listed author(s):
  • Yeung-Nan Shieh

    ()

    (San Jose State University)

  • Chiou-Nan Yeh

    ()

    (Alabama State University)

This paper investigates the impact of monopsony power on the location decision of the firm. It shows that if the transportation rates are a function of distance only and the production function is homogeneous of degree one, the optimum location is independent of monopsony power. However, if the transportation rates are a function of quantity shipped and distance traveled, a homogeneous production of degree one does not ensure independence between the optimum location and monopsony power. This result is significantly different from the well-known Mai-Suwanakul-Yeh proposition in the constant transportation case.

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File URL: http://www.accessecon.com/pubs/EB/2004/Volume18/EB-03R30003A.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 18 (2004)
Issue (Month): 1 ()
Pages: 1-7

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Handle: RePEc:ebl:ecbull:eb-03r30003
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  1. Martinich, Joseph S. & Hurter, Arthur P., 1990. "Generalized comparative statics for the production-location problem," Regional Science and Urban Economics, Elsevier, vol. 20(3), pages 275-294, November.
  2. Miller, Stephen M. & Jensen, Oscar W., 1978. "Location and the theory of production : A review, summary and critique of recent contributions," Regional Science and Urban Economics, Elsevier, vol. 8(2), pages 117-128, May.
  3. A. P. Lerner, 1934. "The Concept of Monopoly and the Measurement of Monopoly Power," Review of Economic Studies, Oxford University Press, vol. 1(3), pages 157-175.
  4. Shieh, Yeung-nan & Mai, Chao-cheng, 1984. "Location and the theory of production Clarifications and extensions," Regional Science and Urban Economics, Elsevier, vol. 14(2), pages 199-218, May.
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