Estimating the market for tomatoes
1985
Melnick, R. | Shalit, H.
Extract: An econometric model of the market for tomatoes in Israelis developed to take into account the distortions brought about by the marketing board and intermediaries. The existence of monopoly and monopsony power is hypothesized by analyzing the middlemens optimal behavior. Being compelled by the marketing board to purchase all produce, wholesalers exert monopsony power by reducing quantities marketed to consumers by selling surpluses to the marketing board at the minimum price. The empircial results confirm the existence of strong monopsony power together with weak monopoly power in that market.
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