Friday, September 26, 2003

Invisible hand
"The study also suggests that retailers set (consumer) prices in excess of the perfectly competitive level for all four commodities."
Gas prices? No, one of three new USDA ERS reports on market concentration in the grocery business.

#2: "Evidence suggests buyers are often able to exercise oligopsony power in procuring fresh produce commodities. Unilateral monopoly power granted by geographic and brand differentiation allows retailers to exercise market power over consumers, in the sense of marking up prices in excess of full marginal costs."

#3: "Retailer ability to hold shipper prices below competitive prices was evident for grapefruit, apples, and lettuce, but not for tomatoes, grapes, and oranges. Consumer prices in excess of purely competitive prices were evident for apples, oranges, grapefruit, fresh grapes, tomatoes, and lettuce."

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