Three economic essays on technology and competition; applications of John M. Clark's concepts to the cement industry, transfer pricing, and product pricing.
Item
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Title
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Three economic essays on technology and competition; applications of John M. Clark's concepts to the cement industry, transfer pricing, and product pricing.
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Identifier
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AAI9207044
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identifier
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9207044
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Creator
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Aranoff, Gerald.
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Contributor
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Adviser: Michael Grossman
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Date
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1991
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, General | Economics, Commerce-Business | Economics, Theory
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Abstract
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1. John M. Clark's concept of too strong competition: The U.S. cement industry as a possible case. The principal hypothesis of this essay is that the U.S. cement industry for the 60's and 70's illustrates Clark's concept of too strong competition. This paper examines the meaning Clark attached to "too strong competition" along with Stigler's objection and Clark's rejoinder. The paper presents a definition of under-capacity for evaluating too strong competition. The paper considers that the mainstream academic view has mischaracterized the cement industry 1909-1946. The paper offers evidence that in the 60's and early 70's cement profit margins were inadequate and were the proximate cause of reduced investment with consequences of severe capacity shortages 1972-1973 and 1978-1979.;2. Transfer pricing for short-run profit maximization in manufacturing. This paper synthesizes the transfer pricing problem for a simple manufacturing model to three theoretical prerequisites or ingredients: quoted price system, durable and specific assets, and demand fluctuations. The writer contends that the transfer price problem in cost accounting literature is in actuality the peak-load problem in utility economics--a short-run problem on how to make optimal use of given fixed assets under demand fluctuations. The major implication is to support marginal-cost, incremental cost plus fixed fee, or dual pricing--methods which imply a low transfer price during periods of idle capacity.;3. The economics of product pricing. The paper explains, with economic diagrams and numerical examples, economic theory for pricing in a simple manufacturing model. Goods are the quoted-price type as opposed to traded on organized commodity exchanges. Cost curves are linear until capacity. Capacity can be of the absolute type or not of the absolute type. The paper demonstrates profit maximization pricing for both types. Other topics discussed: advantages of price discrimination, cost-plus pricing, and behavioral impact of accounting methods on pricing.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
