Agricultural monopolistic competitor and the Pigovian tax

A monopolistically competitive agricultural market structure has some features of competition and some features of monopoly. Monopolistic competition has the following attributes: (a) many sellers; (b) product differentiation; and (c) free entry. In the long-run equilibrium, price equals average total cost, and the agricultural firm earns zero economic profit. The aim of this paper is to construct a relatively simple chaotic long-run monopolistic competitor’s agricultural output growth model that is capable of generating stable equilibria, cycles or chaos. A key hypothesis of this work is based on the idea that the coefficient plays a crucial role in explaining local stability of the monopolistic competitor’s agricultural output, where d is the coefficient of the marginal cost function of the agricultural monopolistic competitor; b is the coefficient of the inverse demand function; [] is the coefficient of average cost growth; m is the Pigovian tax rate; and e is the coefficient of the price elasticity of demand.


Issue Date:
2013-02
Publication Type:
Journal Article
DOI and Other Identifiers:
1418 2106 (Other)
2063 0476 (Other)
PURL Identifier:
http://purl.umn.edu/146820
Published in:
Studies in Agricultural Economics, Volume 115, Number 1
Page range:
57-60
Total Pages:
4
Note:
http://dx.doi.org/10.7896/j.1224




 Record created 2017-04-01, last modified 2017-08-27

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