Revisiting Long-Run Industry Supply
Scale economies play an important role in the "new economic geography" and in "product life cycle" models. These models have important implications for world trade, innovation, and the re-distribution of wealth. Unfortunately, existing treatments of long run industry supply, internal/external scale economies, and market concentration are very fragmented. This paper contains a simple, unified model of long run industry supply. The difference between internal and external scale economies is examined. The impact of scale economies on industry supply is identified and their role in industry equilibrium is discussed. The effect of market concentration is also explored. Among other results, I find reasonable conditions under which the monopolist will produce more output at a lower price than would occur under competition. This surprising result is due to the monopolist's ability to internalize external scale economies.
Volume (Year): 24 (1998)
Issue (Month): 2 (Spring)
|Contact details of provider:|| Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA|
Phone: (201) 684-7346
Web page: https://www.quinnipiac.edu/eea/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
- Krugman, Paul, 1991. "History and Industry Location: The Case of the Manufacturing Belt," American Economic Review, American Economic Association, vol. 81(2), pages 80-83, May.
When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:24:y:1998:i:2:p:207-215. 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: (Victor Matheson, College of the Holy Cross)
If references are entirely missing, you can add them using this form.