Small Leading Firms*

JEFFREY T.La FRANCE; ANDREW SCHMITZ; DAVID ZILBERMAN

doi:10.1111/j.1475-4932.1984.tb00849.x

Small Leading Firms*

JEFFREY T.La FRANCE, ANDREW SCHMITZ, DAVID ZILBERMAN

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Abstract

We formally analyze the question of whether a price leader must control a large share of the market. Our main result is that if other producers have rising marginal costs and behave as price takers, even the smallest firm in a competitive industry with a rising supply curve can enhance its profits by cutting output and raising price, becoming a price leader. Therefore, we would expect pure competition to be destroyed under these technological conditions.

Original language	English
Pages (from-to)	160-164
Number of pages	5
Journal	Economic Record
Volume	60
Issue number	2
DOIs	https://doi.org/10.1111/j.1475-4932.1984.tb00849.x
Publication status	Published - 1 Jan 1984
Externally published	Yes

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10.1111/j.1475-4932.1984.tb00849.x

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Small Leading Firms*

Abstract

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