Competitive Market Price Research Articles

Fuzzy revenue for fuzzy demand quantity based on interval-valued fuzzy sets

Gorzalezany (Fuzzy Sets and Systems 21 (1987) 1) has mentioned the interval-valued fuzzy sets and its properties. In his paper, we may fuzzify the demand quantity d as D by considering the demand function P( d)= a− bd and revenue function R( d)= ad− bd 2. If D is the interval-valued fuzzy set with two triangular fuzzy numbers, we can obtain the fuzzy revenue R( D)= aD− bD 2. Therefore, we can find the membership function μ ̄ R(D)(z) of the interval-valued fuzzy set R( D). We also can find out the estimate of revenue in the fuzzy sense M(x; Δ 1, Δ 2) by defuzzification of fuzzy revenue R( D). Finally, we compare with the crisp and fuzzy case. Scope and purpose Generally, it is not sure if the demand quantity is fixed for the same unit price in a perfect competitive market. In this paper, we explore the problems of maximum revenue and optimal price in the fuzzy sense with the interval-valued fuzzy set for the merchandise in the perfect competitive market, utilizing the linear demand function and quadratic revenue function. We derive the estimation of revenue in the fuzzy sense with mathematical formulas, and illustrate the results by numerical examples.

Profitability of incremental generic promotion of Australian dairy products

The motivation for this study rests on two factors. First, Australian dairy farmers spend around $20 million annually on generic promotion and estimates of the returns from this expenditure are required to facilitate efficient investment decisions. Second, while the Australian dairy industry has been highly regulated, there has been a substantial reduction in assistance over the past decade and farm-gate milk prices were deregulated on 1 July 2000. The profit potential of promotion may vary with the degree of regulation, so past estimates of the returns from promotion may not hold in the competitive environment of the future. Hence, the aim of this study is to examine the effects of government intervention on the profitability for dairy farmers of incremental changes in generic dairy promotion expenditure using a perfectly competitive market as a reference point. Competitive market price and quantity outcomes for the Australian dairy industry are estimated. The impacts of increments in dairy product and competing product generic promotion expenditures on dairy farmers’ profits are assessed using equilibrium displacement modelling. Finally, graphical procedures are used to examine the effects of dairy industry regulation on the profitability of dairy promotion.

Profitability of incremental generic promotion of Australian dairy products

AbstractThe motivation for this study rests on two factors. First, Australian dairy farmers spend around $20 million annually on generic promotion and estimates of the returns from this expenditure are required to facilitate efficient investment decisions. Second, while the Australian dairy industry has been highly regulated, there has been a substantial reduction in assistance over the past decade and farm‐gate milk prices were deregulated on 1 July 2000. The profit potential of promotion may vary with the degree of regulation, so past estimates of the returns from promotion may not hold in the competitive environment of the future. Hence, the aim of this study is to examine the effects of government intervention on the profitability for dairy farmers of incremental changes in generic dairy promotion expenditure using a perfectly competitive market as a reference point. Competitive market price and quantity outcomes for the Australian dairy industry are estimated. The impacts of increments in dairy product and competing product generic promotion expenditures on dairy farmers’ profits are assessed using equilibrium displacement modelling. Finally, graphical procedures are used to examine the effects of dairy industry regulation on the profitability of dairy promotion.

New Dimensions of Market Failure in Electricity and Natural Gas Supply

Has public utility deregulation been a success or a failure? The answer to this question depends on whether one approaches it from the perspective of mainstream neoclassical economics or from the perspective of institutional economics. The difference between these approaches relates not only to the identification of problems, such as the exercise of market power or the promotion of societal values, but also to the scope and nature of remedial public policies. Essentially, mainstream neoclassical economics argues that competitive markets will allocate resources efficiently and constrain market power in public utility industries after economic regulation is removed and open access by competitors is assured. Residual evidence of market failure will be minimized and can be readily corrected by the introduction of well-defined property rights and the free exchange of these rights. Market power is typically defined as the ability of the firm to withhold output and raise price above a competitive market price, but neoclassical economics holds that this potential abuse will be rapidly eroded-given the growing availability of information, new technology, and access to superior supply options. Institutional economics focuses on market failure and market power since they are cardinal factors defining a role for government intervention and regulation. Market power is defined as a dynamic process involving the ability to coerce through pricing, market structure, and political strategies. When skillfully applied, each of these strategies will utilize the unique structural characteristics of public utilities as network industries to establish positions of dominance. This deployment of power will affect the institutions of governance and impact the distribution of income.

Keeping the Power On: How Reliable Is Our Electric System Under Partial Deregulation?

The competitive market price of electricity will contain two components: (1) the costs of providing optimal reliability, and (2) a price premium that would be analogous to a surety bond that the utility will lose if it fails to provide the optimal reliability reflected in the market price. Analyses of future electricity prices that focus only upon capital, fuel, labor, and other directly observable costs are likely to understate competitive market prices. State regulated transmission companies are unlikely to provide optimal reliability. States should rationalize their electric power markets through deregulated transmission companies.

1 Systems Engineering Across Commercial and Public Interest Domains

AbstractA study of the practice of systems engineering across commercial and public interest domains shows that the basic principles of systems engineering are present in all domains, but that each domain brings with it unique aspects. Domains studied include commercial aircraft, facilities, telecommunications, highway transportation, resource management, plutonium disposal, facilities, high‐technology transit buses, motor vehicles, design for environment, and the legal system. Aspects examined are the system life cycle, the system functions, the system architecture, and the requirements drivers. This analysis finds that commercial and public interest domains are dominated by one or more of the following considerations: competitive market price pressures, diverse governmental and public input, existing and developing certification and regulatory standards, the introduction of new technology, and the requirement to serve multiple users.

Pricing practices in Japan

This article assembles evidence from the literature and from the author's interviews in Japan to present a varied, though incomplete, picture of pricing practices in various sectors of the Japanese economy. It is shown that there is no uniform rule of pricing because of differences in cost structure, market power, export strategy, and government intervention. Many prices are administered prices or monopolistic prices. Domestic prices tend to be relatively high while export prices tend to be relatively low. In the 1990s, however, competitive market prices have become increasingly important.

Should Energy Users Pay for Their Utilities' Stranded Costs?

High-cost electric utilities face the same problem as did other high-cost equated industries at the onset of competition. Once, energy users, who are their customers, can choose their suppliers, utilities won`t be able to charge more for electricity than the competitive market price. The high-cost utilities will argue that they incurred their costs at the behest of regulators who ordered them to buy overpriced power from favored generators, who prevented them from marketing their product, and who demanded support of costly social and environmental programs. Changing the rules of the game now and leaving the utilities hanging seems unfair because, after all, they argue, they were only acting as good citizens. Can utilities somehow recover the difference between their total costs and market prices, now called ``stranded costs`` or, even better, ``stranded revenues?`` The author concludes that business acumen and technology--not regulation--will ultimately determine recovery of stranded costs.

The Need For A Marketing Strategy For Alberta Bitumen

In the Alberta oil sands, Alberta has one of the three gigantic petroleum deposits in the world. The others being in the Middle East and in the heavy oil belt of eastern Venezuela. Fifteen years ago, we could produce only a small fraction of this immense deposit (perhaps 4 billion m3 from the Athabasca deposit and a small portion of the Clearwater formation in Cold Lake) and costs were high. Over the past 15 years, government and industry have invested heavily in research and development of new technology for bitumen extraction. The results have been spectacular. Not only can we produce vast amounts of bitumen (~ 45 billion m3) from the Athabasca, Peace River and Cold Lake deposits, but it can be done in many cases at one-third to one-half the previous cost. The application of Steam-Assisted Gravity Drainage Technology from Underground Access (SAGDUA) to the thick continuous sections of the Athabasca deposit can produce 12.6 billion m3 of bitumen for C$7.00/bbl (Fig. 1). This is the same average cost of producing conventional crude in Alberta, excluding exploration costs. At a supply cost for bitumen of C$9.00/bbl, it is estimated that up to 42.5 billion m3 (270 billion bbls) can be recovered. Despite these spectacular gains in technology and the resulting lower cost of producing bitumen, we see no rapid increase in bitumen recovery. Indeed, most new bitumen production projects have been put on the back burner or moth-balled. Five major integrated projects have been cancelled. Why is this occurring? Figure 2 gives the price in U.S. dollars of bitumen in Edmonton. The price is extremely variable and at times very low (C$5.00)/bbl). The field price is even lower (as low as C$3.00/bbl) With such highly variable and often very low prices, it is not surprising that investment and development has been suppressed. It also demonstrates the inadequacy of a marketing strategy for Alberta bitumen which relies on the sale of raw bitumen. Alberta is far from tide water and bitumen is not a readily transportable commodity. Alberta bitumen, therefore, cannot readily access world markets and command competitive world market price. In recent years, bitumen has been transported to the Chicago area, and more recently to Billings, Montana, by dilution with light condensate. This provides a very limited and restrictive market because only specialized conversion facilities can accept bitumen. The dilution condensate, which goes along for the ride, commands a low value because of its high yield of low octane gasoline containing excessive aromatics. These have low demand in an increasingly more environmentally conscious world. What are the options? The sale of bitumen in western Canada is dependent on the very limited and highly variable asphalt market and this currently contributes to the high variability of bitumen prices in Edmonton. The transport of bitumen, as an oil-in-water emulsion, while technically feasible, suffers the limitation in Canada that we live in a very cold climate.

Reflexive pollution

Pollution is reflexive when firms are adversely affected by ambient air concentrations of pollutants that they themselves emit. There are two responses to reflexive pollution. In the first, firms are pollution takers and ignore the self-inflicted damage associated with their marginal product. In the second case, firms do account for marginal self-inflicted damage. Firms' perceptions of their marginal costs differ in the two cases as do the corresponding Pigouvian taxes. Nevertheless, the two sets of competitive market prices are both identical.

Deregulating Self-Regulated Shared Atm Networks

The development of shared ATM networks raises important issues of competition, cooperation and standardization. Sharing necessarily involves cooperation among competing ATM owners and card issuing financial institutions. Networks adopt rules that regulate members' pricing decisions also involve issues of standardization and competition. In particular, most networks make ATM owners sell at wholesale by mandating of interchange fees to replace retail market competition among ATM owners. Networks argue that these rules are necessary to present consumers with a standardized product instead of the chaos of the marketplace and to maintain the integrity of the complementary products offered by members. These are, of course, similar to the standardization and compatibility issues raised in other networks contexts. The paper analyzes the need for this system of fixed interchange fees and sets out a proposal to replace the current system with free market price competition by ATM owners.

New research in local public finance: Introduction

The advantages of decentralized resource allocation mechanisms, long a central focus of the analysis of our private economy, has become a central issue to the study of our public economy as well. Beginning with the pathbreaking papers of Tiebout (1956) and Buchanan (1965), there has developed in the past twenty years an impressive literature examining the efficiency and equity implications of the decentralized, competitive provision of public goods, Given assumptions comparable to those usually required for efficiency in the provision of private goods, it has been shown [Bewley (1981)] that a decentralized economy involving goods with an ‘appropriate degree’ of publicness can provide those goods efficiently without the coordinating guidance of a central government. The required assumptions include: (1) utility-maximizing households who earn exogenous (i.e., endowment) incomes and who are fully informed regarding the quantity, quality and costs of public good production by any supplier; (2) suppliers who can purchase all inputs at competitive market prices and who provide public goods using a common technology which permits a minimum average cost for some finite and sufficiently small number of households; (3) costless relocation by households across suppliers; and (4) no production or consumption externalities across suppliers. In this stylized Tiebout-Buchanan economy, suppliers are local governments or community developers and households select their utility-maximizing levels of public and private goods by locating in their one preferred community. The final allocation gives each household its hreferred

OPEC Is Not a Cartel

OPEC behavior is closer to that of an oligopoly than a cartel, which restricts supply and allocates output, because OPEC has never controlled either world supply or consumption. This group of producers has enough strength in the world market, however, to set prices higher than a competitive market price based on marginal costs, and the real question is why they do not lower production and charge still higher prices in order to extend their producing capacity. Saudi Arabia, OPEC's price leader and largest producer, is the moderating force that reflects that country's unique economic role in OPEC. Efforts to model OPEC decision making misunderstand how OPEC is structured and how it operates. The oligopolistic concept, with Saudi Arabia operating as the leading firm, is more appropriate than crediting Saudi Arabia with political moderation or conservatism. 1 table. (DCK)

The Pricing of Durable Exhaustible Resources

Partial or total durability characterizes a large class of exhaustible resources. We show that Hotelling's r-percent rule will apply to a durable resource produced in a competitive market, but will not apply if the resource is produced in a monopolistic market. However, the r-percent rule does not mean that price is steadily rising. We show that in general the competitive market price will fall initially as the stock in circulation increases, and later will rise as the stock decreases and eventually depreciates toward zero after production ceases. Accounting for durability may thus help explain the U-shaped long-term price profiles observed for many resources.

Car Market Price Competition in the Mid 1970s

Rapid inflation, the severe reduction in demand for cars and the resultant over‐capacity, reestablished the importance of price as a competitive weapon in the car market between late 1973 and 1977. In times of steady economic growth the over‐whelming influence of changes in per capita income on car demand tends to relegate the price variable to a secondary position, and often it is almost totally discounted as a major causative variable. However, in a number of ways the state of the market in the mid 1970s has shown the continuing importance of relative prices: the pricing of imports, exports and price competition by domestic manufacturers all being geared to improving a manufacturer's market penetration. Consequently, the pricing decision remains as one of the most important features of competitive strategy and as a major factor in managerial decision making.

Market Organization and the Effect of Import Quotas: Empirical Evidence

Previous articleNext article No AccessCommunicationsMarket Organization and the Effect of Import Quotas: Empirical EvidenceSusumu HondaiSusumu Hondai Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 84, Number 5Oct., 1976 Article DOIhttps://doi.org/10.1086/260500 Views: 5Total views on this site Citations: 2Citations are reported from Crossref Copyright 1976 The University of ChicagoPDF download Crossref reports the following articles citing this article:Paul Riethmuller Japanese direct foreign investment in agricultural industries: A review of some recent developments, Agribusiness 8, no.11 (Jan 1992): 23–33.https://doi.org/10.1002/1520-6297(199201)8:1<23::AID-AGR2720080103>3.0.CO;2-2 Selected Bibliography, (Jan 1979): 99–141.https://doi.org/10.1016/B978-0-08-024644-4.50013-9

Oligopole et réforme économique : le cas hongrois

Oligopoly and Economie Reform : the Case of Hungary. One of the key longer-term objectives of the Hungarian economic reform of 1968 was to replace detailed central physical planning of enterprise activity by a self-regulating market mechanism. AUocative rationality, as signalled in the self- regulating sphere of the economy by competitive market prices, was to become an important component of state planning and economic guidance. The article examines the problem of introducing competition into Hungarian industry. It notes that competition in industry is inhibited by the large size and high degree of concentration of enterprises. Moreover, unlike other oligopolistically-oriented economies, Hungary lacks competitive and imperfectly competitive modern small and medium-sized firms located between the monopolistic and oligopolistic giants and the final users. The 1968 reform accepted the existing oligopolistic structure of industry as a datum. From this acceptance flow a number of consequences regarding the role of government and pricing, which threaten to put a brake on the original intent of the reform. To ease the oligopolistic situation at home, steps have been taken to allow foreign competition to filter through into the domestic import and export business, and small and medium-sized enterprises run by collective farms have been promoted. The caution with which competition in industry has been approached, while understandable, may have negative effects on the whole longer range objective of the reform.

Joint Products and On-the-Job Training

Previous articleNext article No AccessCommunicationsJoint Products and On-the-Job TrainingA. G. HoltmannA. G. Holtmann Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 79, Number 4Jul. - Aug., 1971 Article DOIhttps://doi.org/10.1086/259803 Views: 3Total views on this site Copyright 1971 The University of ChicagoPDF download Crossref reports no articles citing this article.

Normal Price as a Market Concept

The normal price concept reflects a constructive purpose of economic theory, 632. — Margin of profit-making entrepreneurship a test of normality, 633. — Need of a market-distribution normal particularly in the case of extractive products, whose supply is not expansible during certain periods, 636. — This implies merely some change of emphasis and complementing of the equilibrium theory of value, 638. — The perfect competitive market price really a normalized price, 639. — The distribution normal as a test of the efficiency of our marketing arrangements, 640. — Relation of cross-section to longitudinal view of the market, 641. — Market normal of fixed-supply goods, 642. — For farm products a season's 643. — This may undergo change as the season progresses, 644. — Recapitulation, 648. — Three phases of the market normal, 649. — Interplay of the market-distribution and production-adjustment concepts of normality, 650. — Practical usefulness of the above theory, 651.