TY  - JOUR
AU  - Morrison,Catherine J.
TI  - Markup Behavior in Durable and Nondurable Manufacturing: A production   Theory Approach
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2941
PY  - 1989
Y2  - April 1989
UR  - http://www.nber.org/papers/w2941
L1  - http://www.nber.org/papers/w2941.pdf
N1  - Author contact info:
Catherine J. Morrison
Department of Agricultural Economics
UC, Davis
Davis, CA  95616
Tel: 617/381-3560
E-Mail: no email available
AB  - In this paper I provide a production theory-based framework for measuring markups of price over marginal coat, and the effects of cost and demand characteristics on these markups. Price to marginal coat ratios are measured for various Canadian manufacturing industries, and the impacts of capacity utilization, scale economies, changing prices of variable inputs, import competition, unemployment and other cost and demand determinants are evaluated using adjusted markup indexes and elasticities of the markup ratios. The measured price margins are within a reasonable range and tend to be countercyclical. Moreover, these measures suggest that profitability stemming from the potential to increase price over marginal cost appears primarily to arise from cost characteristics determining scale economies.
ER  -