Overview of the neoclassical production function and the market structure: An application to the Mexican cement industry from 1963 to 1983

This study provides an overview of the Neoclassical theory of production as well as topics on market structure. It analyzes transportation costs, pricing, and economies of scale that determine production concentration and emphasizes the need of studies that would analyze possible effects if a North American Free Trade Area is implemented among the U.S., Canada and Mexico.The Mexican cement industry is used as an example of a sector with diverse industrial organization schemes, where the production process results in a trade-off between energy-saving technologies and pollution wreckage. Labor, capital and materials inputs are considered in the case study where various policy simulations signal some distortions that controlled input markets have on output, efficiency, and productivity during the 1963-1983 period on the cement industry of Mexico.