AGRICULTURAL TECHNICAL INSTITUTE AED 200: PRINCIPLES OF FOOD AND RESOURCE ECONOMICS

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AGRICULTURAL TECHNICAL INSTITUTEAED 200
PRINCIPLES OF FOOD AND RESOURCE ECONOMICS
PART 5 MARKET DECISIONS WK 9-4 OLIGOPSONY FORM
OF INPUT COMPETITION
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III. OLIGOPSONY INPUT COMPETITION

• A. FEW BUYERS ENGAGED IN PURCHASE OF INPUT
  DOMINATE THE MARKET
• B. SUPPLY CURVE FOR INPUT SLOPES UP,

WITH DIRECT RELATIONSHIP
C. MARGINAL INPUT COST IS THE INPUT SUPPLY
CURVE. D. EXAMPLES
FEW BUYERS
MANY PRODUCERS,
1. TOBACCO
FEW PRODUCERS,
2. OE AUTO TIRES
FEW BUYERS
PURPOSE OF COOPS
BILATERAL OLIGOPOLY
3. MEAT
FEW BUYERS
MANY PRODUCERS,
IN THE MAJOR LIVESTOCK STATES, THE FOUR LARGEST
PLANTS BOUGHT
87 OF THE CATTLE
AND 93 OF THE HOGS
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IV. MONOSONISTIC INPUT COMPETITION
A. MANY BUYERS ENGAGED IN THE THE PURCHASE
INPUTS WITH THE CAPACITY OF DIFFERENTIATE SERVICES

• B. SUPPLY CURVE FOR INPUT SLOPES UP
• C. MARGINAL INPUT COST IS ABOVE THE INPUT SUPPLY
  CURVE
• D. DIFFERENTIATE SERVICES .
• 1. CONVENIENCE OF DISTRIBUTION
• 2. LOCATION OF FACILITIES
• 3. WILLINGNESS TO PROVIDE TECHNICAL ASSISTANCE
• 4. WILLINGNESS TO PROVIDE CREDIT

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MARKET
COW-CALF PRODUCER
SUPPLY (SELL)
DEMAND (BUY)
COMPONENT
COW-CALF PRODUCER
FEED LOT
TYPE OF FIRM
OLIGOP- SONIES
TYPE OF COMPETITION
NEAR PERFECT
TYPE OF PRICE ACTION
PRICE TAKERS
PRICE SETTERS
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MARKET
FED LIVESTOCK
SUPPLY (SELL)
DEMAND (BUY)
COMPONENT
FEED LOT
PACKER
TYPE OF FIRM
OLIGOP- SONIES
NEAR PERFECT
TYPE OF COMPETITION
TYPE OF PRICE ACTION
PRICE SETTERS
PRICE TAKERS
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MARKET
PROCESSED MEAT
SUPPLY (SELL)
DEMAND (BUY)
COMPONENT
FOOD WHOLESALERCHAIN STORES FAST FOOD
PACKER
TYPE OF FIRM
OLIGOP- SONIES
TYPE OF COMPETITION
OLIGOPOLY
TYPE OF PRICE ACTION
PRICE SETTERS
PRICE SETTERS
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MARKET
RETAIL MEAT
SUPPLY (SELL)
DEMAND (BUY)
COMPONENT
CONSUMER
RETAIL STORES FAST FOOD
TYPE OF FIRM
PERFECT COMPETITORS
TYPE OF COMPETITION
MONOPOLISITC
TYPE OF PRICE ACTION
PRICE SETTERS
PRICE TAKERS
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THE END OF MY PRESENTATIONS

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