Estimating the Conjectural Variation Elasticity and Market Power in Selected Industries

Document Type : Research Article



In recent studies, many economists have focused on the industry and market. Policymakers in order to provide a comprehensive framework for target market need to have information about the structure of the market and the factors affecting it. The model that is presented in this research shows the behavior of selected industries. This model investigates the structure from competition to monopoly and makes a link between the consumer and the producer behavior. In this paper ten manufacturing industry in Iran with 4 degree ISIC is chosen and market power and conjectural elasticity is examined using panel data. The results suggest that the dairy and print industries with 1.3 and 1.02 respectively, have the most conjectural variation, hence the collusive behavior is shown in these industries. Also cement and beverage industries with -0.27 and 0.51 respectively, have the most competitive structure. In addition chemical and steel industry, respectively, with 5.9 and 4 have the most market power and cement and beverage industries, respectively, with 0.33 and 0.34 have the least market power among the industries surveyed.