Second-Degree Monopoly Wholesaler with Variable Ordering Costs

Ordering costs are usually considered as fixed costs. For the case of one seller and two identical buyers, we examine ordering charges that are proportional to the number of units ordered. We find that no extra profits will be generated, neither for the producer nor for the retailers. Thus, proportional ordering costs are not economically justified.

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Year of publication:	2011
Authors:	Spiegel, Uriel ; Tavor, Tchai
Published in:	International Journal of Business and Economics. - College of Business, ISSN 1607-0704. - Vol. 10.2011, 1, p. 45-59
Publisher:	College of Business
Subject:	retailers \| ordering charges \| excess demand \| excess supply

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Extent:	application/pdf text/html
Type of publication:	Article
Classification:	C44 - Statistical Decision Theory; Operations Research ; L12 - Monopoly; Monopolization Strategies ; L16 - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure; Industrial Price Indices ; M11 - Production Management
Source:	RePEc - Research Papers in Economics

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