Title: The possibility of price umbrellas in Canadian manufacturing industries
Abstract: The paper looks for evidence of 'price umbrelias' within Canadian manufacturing industries. Price umbrellas occur when relatively low-cost firms, trading-off market share against profit margins, set a price high enough to allow relatively high-cost firms to remain in business (the latter have an 'umbrella' held over them). The disaggregated data appear to show (1) that there are significant differences in average costs between the plants within an industry, (2) that the marginal costs of the low-cost plants are non-increasing with output. Together, these findings imply that output could be transferred from high- to low-cost plants with a reduction in total-industry costs, consistent with the existence of price umbrellas. The numbers are quite large.
Publication Year: 1984
Publication Date: 1984-09-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 2
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